Standard Glass Liming Technology: Holds Potential

The company reported revenues of Rs549.68 crore for FY24 and a PAT margin of 10.92%. It reported an EPS of Rs3.52 for the year. Based on this EPS, the PE multiple is 37.78-39.77x

Standard Glass Liming Technology Ltd is tapping the capital markets with its fresh issue to raise Rs210 crore and an offer for sale (OFS) of 1,42,89,367 shares in a price band of Rs133-140. The issue would open on Monday (January 6) and close on Wednesday (January 8). This would be the first issue for calendar year 2025.

The company is a specialized engineering equipment manufacturer in India with in-house capabilities to manufacture all the core specialized engineering equipment required in the active pharmaceutical ingredient (API) and fine chemical products manufacturing process.

The company has increased its manufacturing skill sets by entering into a strategic relationship with AGI Japan, who has invested in Standard Glass. The company has developed niche glass products used in engineering and manufacturing equipment. AGI Glass Japan will sell products across most parts of the world and Japan and would receive royalty on the same. The company has also tied up with Climaveneta Climate Technologies Pvt Ltd for chillers, a key machinery for pharma manufacturing. As a result of these two tie-ups, the company would be able to produce a niche product and help Indian API players produce superior raw materials for the pharmaceutical industry.

The company reported revenues of Rs549.68 crore for the year ended March 24 and a PAT margin of 10.92 per cent. It reported an EPS of Rs3.52 for the year ended March 24. Based on this EPS, the PE multiple is 37.78-39.77 times.

The valuations are comparable to its listed players like GMM Pfaudler Limited and HLE Glascoat Limited.

Looking at the wide bouquet of products that Standard Glass offers to the customers, it becomes a first choice when equipment is to be ordered. Its client list includes the who’s who of the pharma space and most of their business comes from existing or repeat clients. The list of clients is large and makes Standard Glass a preferred customer for new equipment across the value chain. The tie-ups that have been established will enable a large overseas market as well and ensure that Standard Glass is able to reach the wide world and cater to customers globally.

The company is Hyderabad headquartered and the issue is expected to do very well. If grey markets are any indication and should always be taken with a pinch of salt, the current premium is a hefty 2/3rd of the issue price. This indicates that getting allotment would be tough, but rewarding for lucky applicants who do get allotted shares.

The share merits subscription and a close look post listing as well.

(The author is the founder of Kejriwal Research and Investment Services, an advisory firm)