the company financial performance was strong in FY23, however, the FY24 election year caused a slowdown in revenue and profit growth.
Analysts said the company’s key strengths include a strong order-book and diversification of projects, which provide a stable income stream. Furthermore, Garuda Construction and Engineering’s return on equity is superior compared to its peers, despite operating in a cyclical industry.
“The IPO valuation was reasonable, but investors should carefully consider the cyclical nature of the industry and the potential impact of market volatility on the company’s performance,” said Shivani Nyati, Head of Wealth at Swastika Investmart.
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The fresh issue proceeds of Rs 100 crore will be used to fund working capital requirements and general corporate purposes, including unidentified inorganic acquisition.
Garuda Construction offers end-to-end civil construction for residential, commercial, residential and commercial, infrastructure and industrial projects and additional services for infrastructure and also hotel projects.
India’s construction sector has grown at a CAGR of 10.6% between FY18 and FY23, from Rs 2.37 lakh crore to Rs 3.9 lakh crore. The sector is expected to further grow to Rs 6.49 lakh crore by FY30 at a CAGR of 7.5%.
For the year ended March 2024, the company’s operating income fell 4% year-on-year to Rs 151 crore and profit after tax also declined to Rs 36.43 crore from Rs 40.79 crore a year ago. anus.
Corpwis Advisors acted as the sole lead book-running manager for the IPO, and Link Intime India was the registrar for the offering.
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