Sanathan Textiles IPO Review

Sanathan Textiles is a polyester yarn manufacturer and a global supplier of Cotton Yarns, Polyester Yarns and Yarns for Technical Textiles. Having 3 yarn business verticals gives them the unique opportunity to offer a wide variety of yarns that are used by various sectors and industries, across applications and end-uses.

The Promoters i.e., Paresh Vrajlal Dattani, Ajay Vallabhdas Dattani, Anilkumar Vrajdas Dattani and Dinesh Vrajdas Dattani have experience of 44 years, 27 years, 44 years and 44 years, respectively, in the textile industry.​​​​​​

The Revenues from operations for the period ended on Jun 30, 2024, Fiscals ended 2024, 2023 and 2022 were ₹ 7,877.6 Million, ₹ 29,798.0 Million, ₹ 33,450.19 Million and ₹ 32,014.60 Million respectively. The EBITDA for the period ended on Jun 30, 2024, Fiscals ended 2024, 2023 and 2022 were ₹ 830.71 Million, ₹ 2,488.81 Million, ₹ 2,753.36 Million, and ₹ 5,537.52 Million, respectively. The Profit after Tax for the period ended on Jun 30, 2024, Fiscals ended 2024, 2023 and 2022 were ₹ 500.73 Million, ₹ 1,338.48 Million, ₹ 1,527.41 Million, and ₹ 3,554.52 Million respectively.

For the Sanathan Textiles IPO, the company is issuing shares at a pre-issue EPS of ₹ 18.6 and a post-issue EPS of ₹ 15.86. The pre-issue P/E ratio is 17.26x, while the post-issue P/E ratio is 20.24x against the Industry P/E ratio is 30x. The company's ROCE for FY24 is 11.80% and RoE for FY24 is 11.09%. These metrics suggest that the IPO is fairly priced.

The Grey Market Premium (GMP) of Sanathan Textiles showing potential listing gains of 8.72%. Given the company's financial performance and the valuation of the IPO, we recommend Investors to Avoid to the Sanathan Textiles Limited IPO for Listing gain.

Disclaimer: The information provided in this IPO review is for educational and informational purposes only and should not be construed as financial advice or an offer to buy or sell securities. The review must not be used as a singular basis of any investment decision. The views herein are of a general nature and do not consider the risk appetite or the particular circumstances of an individual investor; readers are requested to take professional advice before investing. Nothing in this document should be construed as investment advice. The content is based on publicly available information and market perceptions as of the date of publication and is subject to change. Neither the author nor the website is responsible for any losses or damages arising from the use of this information. 

About the Author
 CA Abhay Kumar (Also known as  CA Abhay Varn) is a qualified Chartered Accountant by profession and cleared CA at age 21. He is a SEBI Registered Research Analyst with Registration Number - INH300008465. He Possesses 8+ years of experience in the Stock Market Field and has also worked in Big CA firms during the training period. He is good at Technical analysis and Fundamental Analysis and uses both Technical and Fundamental analysis along with five other important factors that affect the movement of the Market namely Global Market Analysis, Upcoming Event Analysis, Institutional Money Analysis, Derivative Data Analysis, and Emotions and Sentiment of Traders and Investors in his Framework called - Technical Fundamental GUIDE to find the winning Trades.
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