In today’s briefing:
- Five-Star Business Pre-IPO – The Positives – Fast Growth, Juicy Margins and Strong Backers
- Kaynes Technology- Forensic Analysis
- Rainbow Children’s Hospital (RAINBOW IN): Flying High Backed by Niche Focus and Business Recovery
- TCS: Resilient Outlook but Fairly Valued
Five-Star Business Pre-IPO – The Positives – Fast Growth, Juicy Margins and Strong Backers
- Five-Star Business Finance (0958461D IN) is looking to raise around US$300m in its upcoming India IPO. The deal will be run by ICICI Securities, Edelweiss, Kotak, and Nomura.
- Five-Star Business is a non-banking financial company (NBFC-ND-SI) that provides secured business loans to micro-entrepreneurs and self-employed individuals.
- In this note, we talk about the positive aspects of the deal.
Kaynes Technology- Forensic Analysis
- Kaynes Technology India (7575164Z IN) (KTIL) has received SEBI’s approval for its IPO.
- Company is one of the end-to-end and IoT solutions enabled integrated electronics manufacturing player, having capabilities across the entire spectrum of ESDM services.
- Key forensics issues that should not be ignored include high liabilities off the books, grey areas surrounding receivables, perplexing churning across CFO and directors posts, etc.
Rainbow Children’s Hospital (RAINBOW IN): Flying High Backed by Niche Focus and Business Recovery
- Rainbow Children’s Hospital (RAINBOW IN) is India’s largest pediatric multi-specialty healthcare chain, operating 15 hospitals and 3 clinics in 6 cities, with a total bed capacity of 1,550+.
- Due to its presence in the affluent cities of India, the company has superior ARPOB. With the normalization of business occupancy and outpatient volume improved significantly.
- The company plans to add 100 beds by the end of FY23. Higher occupancy and greater scale of operation are the biggest margin driver for the company.
TCS: Resilient Outlook but Fairly Valued
- Demand environment remains robust despite recessionary fears in US and Europe. Demand is being driven by structural factors like shift in the business model towards enterprise-wide digital transformation.
- One of the biggest headwinds – attrition – has now peaked and is trending downwards. Job market has cooled off and salaries of new hires have become reasonable.
- While the demand outlook and margin guidance is resilient, we estimate that the current valuations are fairly pricing the optimism. Projected IRRs are likely to be subdued from here on.
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