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Background

Quadrant Future Tek Limited is a research-focused company specializing in Train Control and Signalling Systems under the KAVACH project, enhancing safety and reliability for Indian Railways. It also manufactures specialty cables for railways, defence, and renewable energy, using advanced Electron Beam technology for superior performance. The company has received significant contracts for its KAVACH system and partners with RailTel to expand its deployment in India and abroad. With a focus on innovation, quality, and operational efficiency, Quadrant has shown strong revenue growth and a commitment to cutting-edge solutions.

Details of the Issue:

The public issue consists of fresh issue up to Rs 290 Cr. Company proposes to utilize the Net Proceeds towards: -

* Funding long-term working capital requirements (Specialty Cable Division):- 150 Cr.

* Capex for development for Electronic Interlocking System :- 24 Cr

* Prepayment of outstanding working capital term loan: - 24 Cr.

Investment Rationale:

*  Innovative Development in Automatic Train Protection Systems

* Strategic Partnership with RailTel for KAVACH Deployment

* In-House Design and Development for Rail Signalling Solutions

* Unique Technology for High-Performance Specialty Cables

* Advanced Manufacturing Facilities with Quality Focus

* Global Demand for Specialty Cables in EV and Renewable Sectors

*  Market opportunity for KAVACH

Valuation and Recommendation: -

Quadrant Future Tek Limited has secured a strong order book, including a notable ?979 Cr contract for KAVACH implementation, which highlights its robust revenue visibility. Strategic partnerships, such as with RailTel for KAVACH deployment, bolster its position in domestic and international markets. With favourable industry tailwinds and increasing demand for its offerings, Quadrant is well-positioned for sustained growth. Based on peer comparison, Quadrant Future Tek Limited stands out with a healthy 24% EBITDA margin and impressive returns, including a 21% ROCE and 33% ROE, which highlight its profitability and operational efficiency. The company’s EV/order book ratio is reasonable at 1.3x. Considering these factors, along with its advanced technology, expanding order book, and long-term growth prospects, we assign a Subscribe rating to this IPO.

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SEBI Registration number is INH0000017660