Given that Inox India is financially sound with no debts and a history of dividend payouts, the IPO could attract investor interest, says an ET analysis.
Inox India: Financials, business operations & more
Business operations: Inox India operates three plants in India, producing cryogenic tanks vital for sub-zero temperature applications. It has a capacity of 3,100 equivalent tank units and 2.4 million disposable cylinder units. It’s constructing a new Rs 200 crore plant using internal funds. Revenue streams include 78% from industrial gases such as oxygen, nitrogen and argon, 25% from LNG tanks, and the remainder from cryo-scientific applications for ISRO equipment.
Financial performance: Revenue surged 27% annually between FY21 and FY23 to Rs 984 crore, while operating profit before depreciation and amortisation – Ebitda – rose 22% yearly to Rs 222 crore, maintaining a margin of 22.6%. Net profit escalated to Rs 152 crore from Rs 96 crore during the period, marking a 26% increase.
Inox India IPO
Risks and valuation: Around 56% of revenue stems from the top 10 clients, with half of the orders being repeat orders, posing a risk if orders are canceled or delayed. Fluctuations in raw material costs, constituting 65% of total revenue, could affect margins.
With a P/E multiple of 29 times annualized net profit for H1 of FY24, Inox India doesn’t have direct comparables in India. However, global peers CIMC Enric and Chart Industries trade at lower P/Es (10 and 21, respectively), while Indian counterparts like L&T and GMM Pfaudler trade at 30-45 times 1-year forward earnings.