Forcas Studio IPO Review

Forcas Studio is into Menswear and deals in men’s garments such as Shirts, Denims, T-shirts, trousers, Cotton pants, sports-wear, party-wear, fashion wear, boxers etc. and cater pan India through online and wholesale in our own brand and also white-labelling for other brands such as Landmark Group, V-Mart Retail, V2 Retail, Highlander, Cobb, Kontail and many more.

 The Company is led by a highly experienced senior management team with their Managing Director, Sailesh Agarwal, continuing to be involved in strategic planning, conceptualization, design and production development, who has been intimately involved in the business for 15 years, has overseen the development of the business strategy and has extensive expertise in sourcing, designing, retailing and establishing distribution channel partnerships.

Financially, Forcas Studio revenue increased from ₹5,113.14 Lakhs in FY21 to ₹5,380.44 Lakhs in FY22 but further jumped to ₹7,162.42 Lakhs in FY23 and currently decreased at ₹2,424.30 Lakhs in 11MFY24. But, EBITDA is stable from ₹341.84 Lakhs in FY21 to ₹354.57 Lakhs in FY22 and further to ₹450.15 Lakhs in FY23 and currently at ₹927.59 Lakhs in 11MFY24. The PAT is also stable from ₹58.38 Lakhs in FY21 to ₹80.71 Lakhs in FY22 and further to ₹117.19 Lakhs in FY23 and currently at ₹116.97 Lakhs in 11MFY24. This indicates a steady financial performance.

For the Forcas Studio IPO, the company is issuing shares at a pre-issue EPS of ₹1.98 and a post-issue EPS of ₹0.66. The pre-issue P/E ratio is 40.40x, while the post-issue P/E ratio is 121.21x against the industry P/E ratio of 136x. The company's ROCE for 11MFY24 is 18.54% and ROE for 11MFY24 is 27.06%. These metrics suggest that the IPO is fairly priced.

The Grey Market Premium (GMP) of Forcas Studio indicates potential listing gains of 85% - 90%. Given the company's financial performance and the valuation of the IPO, we recommend Investors to Apply the Forcas Studio Limited IPO for Listing gain or long term investment purposes.