Please refer to important disclosures at the end of this report
1
Incorporated in 2001,
Antony Waste Handling Cell Limited (AWHCL) is engaged
in offering Municipal Solid Waste (MSW) management services. The service
range of the company includes solid waste collection, transportation, processing
and disposal services to Indian municipalities. It has in-
house expertise in landfill
construction and management sector.
Positives: (a) Presence in the fast-growing MSW management industry with end
-
to-
end capabilities; (b) Strong track record of project execution; (c) Long term
contracts with municipal
with strong domain expertise.
Investment concerns: (a) AWHCL reported poor consolidated top-
line (CAGR of
~1% over FY2017-19), while bottom-line reported de-
growth over the same
period, hence growth conc
erns remain; (b) This business involves receivables risk
from municipalities, which can lead to financial instability of the company. This
also restricts further investment in asset development.
Outlook & Valuation: AWHCL was unable to performance on top-line & bottom
-
line fronts over FY2017-
19, and hence we believe that concerns regarding the
company’s financials exist. Further, the business involves
working capital and
receivables risk from municipalities, which restricts the future growth
opportunities. Despite the lower pre-issue P/E at 10.1x 1HFY20
20 annualized
earnings (at the upper end of the issue price band), we
recommend NEUTRAL
rating on the issue.
Key Financials
Y/E March (Rs cr)
FY2017
FY2018
FY2019
1HFY20
Net Sales
276
276
284
219
% chg
-
0.1
2.7
-
Net Profit
41
40
34
38
% chg
-
(2.8)
(13.7)
-
OPM (%)
23.5
25.3
26.9
30.4
EPS (Rs)
16.0
15.6
13.5
14.8
P/E (x)
18.7
19.2
22.3
-
P/BV (x)
5.3
6.3
4.9
-
RoE (%)
28.4
32.8
21.9
-
RoCE (%)
18.9
24.5
19.7
-
EV/Sales (x)
3.2
3.1
3.1
-
EV/EBITDA (x)
13.8
12.1
11.6
-
Angel Research; Note: Valuation ratios based on pre-issue outstanding shares and at upper end
of the price band
Neutral
Issue Open: March 04, 2020
Issue Close: March 06, 2020
Offer for Sale: NIL
QIBs 50% of issue
Non-Institutional 15% of issue
Retail 35% of issue
Promoters 48.9%
Others 51.1%
Post Issue Shareholding Pattern
Post Eq. Paid up Capital: Rs13.4cr
Issue size (amount): Rs203cr - **Rs206cr
Price Band: Rs295-300
Lot Size: 50 shares and in multiple thereafter
Post-issue implied mkt. cap: * Rs789cr - **Rs803cr
Promoters holding Pre-Issue: 51.1%
Promoters holding Post-Issue: 48.9%
*Calculated on lower price band
** Calculated on upper price band
Book Building
Fresh issue: Rs35cr
Issue Details
Face Value: Rs.5
Present Eq. Paid up Capital: Rs12.8cr
Amarjeet S Maurya
+022 39357600, Extn: 6831
amarjeet.mau[email protected]angelbroking.com
Antony Waste Handling Cell Ltd
IPO Note |
Waste Handling
March 03, 2020
Antony Waste Handling Cell Ltd | IPO Note
March 03, 2020
2
Company background
Incorporated in 2001, Antony Waste Handling Cell Limited is engaged in offering
Municipal Solid Waste (MSW) management services. The service range of the
company includes solid waste collection, transportation, processing and disposal
services to Indian municipalities. It has in-house expertise in landfill construction and
management sector.
The company is a part of Antony group, which has a diversified business model
including ancillary and automotive body-building industries. Antony Waste Handling
Cell Ltd has completed 25 projects for municipalities and private players till
November 30, 2018. The company mainly takes MSW processing projects, MSW
C&T projects, and mechanized sweeping projects.
Some of the major clients of the company are Municipal Corporation of Delhi
(MCD), Jaypee International Sports, and Kalyan Dombivali Municipal Corporation
(KDMC). Currently, the company has 515 vehicles whose components are obtained
from international suppliers named BUCHER Municipal AG and Compost System
GmbH.
Issue details
AWHCL is raising `35
cr through fresh issue & Private equity fund selling 57 lakhs
equity shares through offer for sale in the price band of `295-300.
Exhibit 1: Pre and post IPO shareholding pattern
No of shares (Pre-
issue)
%
No of shares (Post-
issue)
%
%
Promoters
13,075,780 51.1
13,075,780
48.9
Others 12,512,978 48.9 13,679,645 51.1
25,588,758
100.0
26,755,425
100.0
Source: Source: RHP, Note: Calculated on upper price band
Objectives of the Offer
Reduction of the aggregate outstanding borrowings of the Company on
a consolidated basis (~`30cr)
General corporate purposes, subject to the applicable laws.
Antony Waste Handling Cell Ltd | IPO Note
March 03, 2020
3
Consolidated Income Statement
Y/E March (` cr) FY2017 FY2018
FY2019
1HFY20
Net Sales
276
276
284
219
% chg
0.1
2.7
-
Total Expenditure
211
206
208
152
Raw Material
49
36
32
28
Personnel
61
64
66
44
Others Expenses
101
106
109
80
EBITDA
65
70
76
66
% chg
7.6
9.2
-
(% of Net Sales)
23.5
25.3
26.9
30.4
Depreciation& Amortization
11
13
18
11
EBIT
54
57
58
56
% chg
6.3
1.4
-
(% of Net Sales)
19.5
20.7
20.4
25.6
Interest & other Charges
25
23
25
14
Other Income
15
15
15
7
(% of PBT)
35.2
30.0
31.1
14.3
Recurring PBT
44
49
48
49
% chg
11.3
(
2.3)
-
Tax
3
9
13
11
(% of PBT)
6.3
18.2
27.8
22.7
PAT (reported)
41
40
34
38
Extraordinary Items -
-
-
(0)
ADJ. PAT
41
40
34
38
% chg (2.8)
(13.7)
-
(% of Net Sales)
14.9
14.4
12.1
17.4
Basic EPS (`)
16.0
15.6
13.5
14.8
Fully Diluted EPS (`)
16.0
15.6
13.5
14.8
% chg (2.8)
(13.7)
-
Source: Company, Angel Research
Antony Waste Handling Cell Ltd | IPO Note
March 03, 2020
4
Consolidated Balance Sheet
Y/E March (` cr)
FY2017
FY2018 FY2019
1HFY20
SOURCES OF FUNDS
Equity Share Capital
1
1
7
7.15
Reserves& Surplus
143
120
150
170
Shareholders Funds
144
121
157
177
Debt
139
111
136
150
Deferred Tax Liability
11
16
19
18
Minority Interest
39
49
56
66
Total Liabilities
282
302
368
411
APPLICATION OF FUNDS
Net Block
140
147
174
220
Capital Work-in-Progress
5
-
15
15
Current Assets
215
275
312
335
Inventories
0
0
0
0
Sundry Debtors
67
73
89
95
Cash
13
34
22
23
Loans & Advances
3
7
4
5
Other Assets
132
161
197
212
Current liabilities
86
132
149
175
Net Current Assets
129
143
163
160
Deferred Tax Asset
8
12
16
17
Mis. Exp. not written off
-
-
-
-
Total Assets
282
302
368
411
Source: Company, Angel Research
Antony Waste Handling Cell Ltd | IPO Note
March 03, 2020
5
Consolidated Cash Flow Statement
Y/E March (` cr) FY2017
FY2018
FY2019
1HFY20
Profit before tax
44
49
48
49
Depreciation
11
13
18
11
Change in Working Capital
(20)
(29)
(38)
(17)
Interest / Dividend (Net)
(0)
0
0
0
Direct taxes paid
(4)
(9)
(14)
(12)
Others
15
12
13
11
Cash Flow from Operations
47
37
30
42
(Inc.)/ Dec. in Fixed Assets
(44)
3
(63)
(57)
(Inc.)/ Dec. in Investments
18
11
9
4
Cash Flow from Investing
(26)
14
(54)
(54)
Issue of Equity
0
0
0
0
Inc./(Dec.) in loans
(17)
(10)
34
22
Dividend Paid (Incl. Tax)
(66)
(4)
(6)
0
Interest / Dividend (Net)
41
(16)
(16)
(10)
Cash Flow from Financing
(42)
(30)
12
12
Inc./(Dec.) in Cash
(22)
21
(12)
1
Opening Cash balances
32
11
31
20
Closing Cash balances
11
31
20
20
Source: Company, Angel Research
Antony Waste Handling Cell Ltd | IPO Note
March 03, 2020
6
Key Ratios
Y/E March FY2017
FY2018 FY2019
Valuation Ratio (x)
P/E (on FDEPS) 18.7
19.2
22.3
P/CEPS 14.7
14.6
14.6
P/BV 5.3
6.3 4.9
EV/Sales 3.2
3.1 3.1
EV/EBITDA 13.8
12.1
11.6
EV / Total Assets 3.2
2.8 2.4
Per Share Data (`)
EPS (Basic) 16.0
15.6
13.5
EPS (fully diluted) 16.0
15.6
13.5
Cash EPS 20.4
20.6
20.6
DPS 0.0
0.0 0.0
Book Value 56.4
47.5
61.5
Returns (%)
ROCE 18.9
24.5
19.7
Angel ROIC (Pre-tax) 20.2
28.6
22.6
ROE 28.4
32.8
21.9
Turnover ratios (x)
Asset Turnover (Gross Block) 2.0
1.9 1.6
Inventory / Sales (days) 0
0 0
Receivables (days) 89
96
114
Payables (days) 21
42
47
Working capital cycle (ex-cash) (days) 68
54
68
Source: Company, Angel Research
Antony Waste Handling Cell Ltd | IPO Note
March 03, 2020
7
Research Team Tel: 022
-
39357800 E
-
mail: rese[email protected]elbroking.
com Website:
www.angelbroking.com
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