For information purpose only.
Tally:-
Subscribe : 7
Avoid : 3
ICICI Direct : Subscribe
The standalone multiple on FY16 basis looks expensive at 50x. However, accounting for the Chhaya merger, adjusted P/E appears at 34x FY16. Completion of Chhaya acquisition would further strengthen S Chand’s leadership position in the K-12 segment, which would enable it to post 15% revenue CAGR in the near term. We have a SUBSCRIBE recommendation on the issue on the back of growth prospects.
GEPL Capital : Subscribe
S Chand & Company Ltd (SCHAND) stands to gain from operating leverage. At a P/E of 35xs of FY16 EPS. We believe that SCHAND. demands a discount to its domestic peers. We assign a Subscribe rating to the IPO.
LKP Research : Subscribe
We believe that its 7 decade legacy, leadership in K-12 education content market, strong margin & growth prospects have been captured well at the valuations of Rs 660-670 per share where the scrip would trade at 39XFY16 earnings. We recommend a SUBSCRIBE on the S Chand IPO for listing gains.
Angel Broking : Subscribe
considering the company’s leadership position in K-12 market, strong brand recall and pan India reach along with higher revenue/PAT growth (revenue/PAT grew at a CAGR of 33%/36% over FY2012-16 v/s 11%/7.5% of Navneet), we believe that SCCL is rightly placed for further growth. Thus, we recommend a SUBSCRIBE on the issue.
Prabhudas Lilladher : Subscribe
considering strong parentage, branded portfolio, professional management, reducing debt profile post IPO, good growth opportunity & limited listed opportunities to play the Publishing segment, recommend ‘subscribe’ with a long term objective.
Hem Securities : Subscribe
At higher end of price band of Rs 660-670 ,co is bringing the issue p/e multiple of around 31. However looking after fundamentals like high growth prospects , strong brand name & leading position of co , we recommend "Subscribe" on issue for long term.
SMC Global Securities Ltd. : Subscribe ( 3 stars i.e. Fair)
The sales seasonality in its K-12 segment materially affects its operating revenue, margins and cash flows from quarter to quarter. Accordingly, as per the management estimates, its operating revenues and margins during the first three Fiscal quarters have typically been lower, compared to the fourth Fiscal quarter. Considering the seasonality of the business, an investor with long term prospect may opt the issue.
SPTULSIAN.com : Avoid
At Rs. 670, company’s market cap will be Rs. 2,325 crore and EV Rs. 2,458 crore. Based on estimated FY17 and FY18 EPS of about Rs. 21 and Rs. 26 respectively (including Chhaya), the PE multiples are 31x and 25x respectively. EV/EBITDA multiples are 14x and 12x for FY17 and FY18 respectively, which are quite rich. On expensive valuations, investors can give this IPO a miss.
DSIJ.in : Avoid
In the long run, we expect the company may give returns of about ~10% to its investors which is not so promising. Looking at margins pressure, lower growth prospects and high valuation, we recommend our investors to avoid subscribing to this IPO.
MONEYCONTROL.com : Avoid
At the upper price band of Rs 670, SCCL seems to be valued at approximately 45x FY17 (projected) earnings, which, in our opinion, is costlier than Navneet Education (trading at 25x FY17 expected earnings), which has a more diversified business model and comparatively better operational/return ratios. We suggest the investors to avoid the issue for the time being and wait for a better re-entry opportunity in the secondary market.
Zerodha (Trading Account)
RHP
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