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About the Company

Aeroflex Industries, a subsidiary of SAT Industries manufactures and supplies environmentfriendly metallic flexible flow solution products like multiple variety of hoses, tubes and hose assemblies.The company’s clientele includes distributors, fabricators, maintenance repair and operations companies (MROs), original equipment manufacturers (OEMs), and companies operating in a wide range of industries. Moreover, the company has recently forayed into manufacturing products made of bronze. The company’s products replace flow solutions made of rubber and polymers. Flexible flow solutions made with stainless steel corrugation are becoming a preferred solution because of their advantages. The company is coming up with an IPO comprising of fresh issue of ~15mn shares and OFS of ~17.5mn shares, aggregating to a total of ~Rs3.5bn.

Diversified Product Portfolio

The company’s product list includes braided hoses, unbraided hoses, solar hoses, gas hoses, vacuum hoses, braiding, interlock hoses, hose assemblies, lancing hose assemblies, jacketed hose assemblies, exhaust connectors, exhaust gas recirculation (EGR) tubes, expansion bellows, compensators, and related end fittings. As on Mar’23, the company recorded more than 1,700 Product SKUs (Stock Keeping Units) in its product portfolio.The company exports its products to 80+ countries including Europe, the USA and others. It supplies products to a wide spectrum of industries for the controlled flow of all forms of substances including air, liquid and solid. Flexible flow solutions play a critical role in the transfer of substances (air, liquid and solid) in any industrial or commercial ecosystem, connecting the origin and end points of various processes.

Manufacturing Facility with Multiple Certifications

Its manufacturing facility is located at Taloja, Navi Mumbai, Maharashtra, and is spread across nearly 3.6 lakhsq. ft of area. The facility is certified with Annex III, Module H of Directive 97/23/EC on pressure equipment, management system as per ISO 9001:2015, environmental management systemISO 14001:2015, ISO 45001:2015 (occupational health &safety), testing certificate gas hoses1/2” NB Hose Assembly, NABL ISO /IEC 17025:2017, statement of 153 conformity for design, manufacturing, and testing of SS corrugated flexible hose assembly, statement of conformity for quality procedures applied standard EN ISO 10380:2012 and BS 6501-1 (E:2004), certificate of design assessment required for quality management systems, environmental management systems, health and safety management systems.

Financials in Brief

On the financial front, PTL has reported a turnover of Rs1448.4mn, Rs2409.9mn and Rs2694.8mn for FY21, FY22 and FY23 respectively. The company reported profit of Rs60.1mn, Rs275.1mn and Rs301.5mn for the respective periods. It has recorded a healthy Revenue, EBITDA and PAT CAGR of 36%, 56% and 126% respectively over FY21-23. For the last three fiscals, the company has reported an average EPS of Rs. 2.21 and an average RoNW of 25.56%

Our View

On FY23 financials, the IPO is valued at 42x P/E, 26.6xEV/EBITDA and 5.3x EV/Sales. The company is likely to benefit from growth prospects in traditional industrial segments like manufacturing, automotive, oil &gas among others as well as emerging industries likesolar, lithium-Ion battery management and robotics among others. Moreover, a strong track record of commercialising and scaling up new products and R&D capabilities puts the company in a good position to capture the requirements of diverse end user industrial sectors. In view of diversified product portfolio, strong financials, global footprint, focus on expanding its capacities, products and R&D capabilities, we recommend a SUBSCRIBE to the issue

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