Mamata Machinery, a leading name in the packaging machinery industry, is set to launch its Initial Public Offering (IPO) from 19 December to 23 December 2024. The IPO seeks to raise INR 179 crore entirely through an Offer for Sale (OFS), with a price band of INR 230 to INR 243 per share (an additional INR 12 per share discount for employees). Investors can expect the shares to debut on the stock exchange on 27 December 2024.
Company Overview: Mamata Machinery
Established over three decades ago, Mamata Machinery has carved a niche in manufacturing advanced machinery for plastic bags, pouches, and co-extrusion blown films. The company boasts a significant global presence, supported by its manufacturing unit in the United States. Holding a 3% share in the global packaging machinery market, it is a major exporter, with 70% of its FY24 revenue of INR 237 crore stemming from international markets. This robust export performance underscores the company’s global reach and operational strength.
Financial Performance Highlights
Mamata Machinery’s financial metrics reflect a well-managed and profitable enterprise:
- Revenue: INR 237 crore in FY24
- Net Profit: INR 36 crore, a remarkable 60% year-over-year growth
- Margins:
- Gross Margin: 58%
- EBITDA Margin: 21%
- Net Margin: 15%
- Earnings Per Share (EPS): INR 14.7
- Return on Equity (RoE): Approximately 27%
Additionally, the company’s debt-free balance sheet and high profitability ratios place it ahead of its industry peers.
Mamata Machinery IPO Analyst Views
Ms. Anubhuti Mishra, an analyst at Swastika Investmart, highlights Mamata Machinery IPO as a compelling investment opportunity. She emphasizes the company’s leadership in exporting bag and pouch-making machinery, backed by its significant global presence and a dedicated manufacturing unit in the United States.
According to Ms. Mishra, Mamata Machinery has shown steady growth in both revenue and profits, underscoring its strong fundamentals. She considers the IPO to be attractively priced at a fair price-to-earnings (PE) valuation, making it a favourable entry point for investors interested in the machinery and manufacturing sector.
Given the company’s consistent performance and international operations, Ms. Mishra recommends subscribing to this IPO.
Ms. Geetanjali Kedia of SPTulsian Investment Advisors provides an in-depth analysis of Mamata Machinery IPO, highlighting its robust business model, financial performance, and competitive valuation.
Mamata Machinery, a 35-year-old manufacturer of plastic bag, pouch, and packaging machinery, operates a B2B business model with one plant in India and another in the United States. The company sells its machines under the Vega and Win brand names and commands a 3% share in the global export market for packaging machinery. Notably, 70% of its FY24 revenue of INR 237 crore was derived from international markets, where realizations are approximately three times higher than domestic levels.
In FY24, the company recorded strong financial performance:
- 60% of revenue came from bag and pouch-making machines.
- Operating margins remained healthy with 58% gross margin, 21% EBITDA margin, and 15% net margin.
- FY24 PAT surged by 60% YoY to INR 36 crore, resulting in an EPS of INR 14.7 on an equity base of INR 25 crore and a net worth of INR 133 crore.
However, the seasonal nature of the business leads to revenue skewed towards the second half of the year. For instance, Q1FY25 revenue stood at INR 28 crore with a lower EBITDA margin of just 4%.
Ms. Kedia finds the IPO’s valuation highly appealing. With an estimated FY25 EPS of INR 17, the company’s projected market capitalization of INR 600 crore translates to a PE multiple of 14x FY25E earnings, which she considers attractive given the high margins, 27% RoE, and debt-free balance sheet.
She also compares Mamata Machinery’s financial parameters with its peers:
- Rajoo Engineers: INR 200 crore revenue, 10% net margin, 18% RoE, but a market cap of INR 4,000 crore for INR 25 crore PAT.
- Windsor Machines: INR 2,650 crore market cap for INR 350 crore revenue, but low operating margins and net loss.
- Kabra Extrusion: INR 1,750 crore market cap for INR 600 crore revenue, 5% net margin, and single-digit RoE.
Ms. Kedia concludes that Mamata Machinery’s stronger financials and lower valuation make it a compelling investment option compared to its peers.
The following analyst insights reveal common trends in brokerage recommendations for the upcoming IPO. Below is a detailed compilation of broker opinions:
- BP Wealth – Subscribe
- Canara Bank Securities – Subscribe
- Elite Wealth – Apply
- Jainam Broking – Subscribe for long-term
- Ventura Securities – Subscribe
Conclusion: Why Mamata Machinery Stands Out
The Mamata Machinery IPO is poised to garner significant investor attention due to its robust fundamentals, consistent financial growth, and competitive positioning in the global packaging machinery sector. Analysts recommend subscribing to this IPO, highlighting its fair valuation and promising growth prospects.
For investors seeking a balanced mix of short-term returns and long-term stability, Mamata Machinery offers a compelling proposition. With its established international footprint, debt-free operations, and attractive margins, this IPO is an opportunity worth considering.  For more information related to IPO GMP, SEBI IPO Approval, and Live Subscription stay tuned to IPO Central.
