Garuda Construction IPO - Issue Details, Financials, Peer Comparison, Strategies, Risks And More: DRChoksey

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..DRChoksey Research Report.Garuda Construction and Engineering Ltd. will launch its initial public offering tomorrow and the offer closes for subscription on Oct. 10 and the listing is expected to take place on Oct.15. The Mumbai-based infrastructure development company that specialises in civil construction, infrastructure development and engineering services has fixed the price band in the range of Rs 92-95 Apiece. The Rs 264.1 crore IPO comprises of a fresh issue of Rs 173.85 crore and offer for sale of Rs 90.25 crore.. Object of the offerWorking capital requirements. General Corporate Purposes including unidentified inorganic.Strategies: Thrust into the Construction and Development segmentIncrease its focus on and execute greater number of projects on a lock-and-key basis.Continue focusing on timely completion.Continue to maintain an asset light model for its business operations.Expand the geographical footprint..Outlook and Valuation:Garuda Construction and Engineering, a leading Mumbai-based infrastructure company, is well-positioned to benefit from India's growing demand for residential, commercial and industrial projects. The company operates with an asset-light model, outsourcing equipment and labor to improve cost efficiency while focusing on highquality construction. Garuda has built a strong reputation through the timely completion of complex projects. From FY22 to FY24, the company's revenue grew at a 41% CAGR, rising from Rs 770 million to Rs 1542 million, with Ebitda growing at a 35% CAGR. PAT increased from Rs 188 million to Rs 364 million, maintaining stable margins of 24%-25%. Garuda's impressive ROE of 36% and ROCE of 47% outperform industry peers, reflecting its operational efficiency and effective capital management. The company’s strengths include its asset-light model, presence across multiple regions in India and a robust Rs 14,083 million (as per RHP) spread across various sectors. This diverse portfolio ensures steady revenue and positions Garuda for further growth in India's infrastructure sector. Currently, Garuda trades at a PE ratio of 24.3 times and an enterprise value/Ebitda of 17.7x, slightly above peers like PSP Projects and Capacite Infraprojects. Given its solid financials, growing project portfolio, and proven track record, we recommend a "Subscribe" rating for the IPO..Risks: The company generates most of its revenue from its top 10 clients, mainly promoter-related entities and group companies. Losing any significant client could negatively affect its business and financial outlook. Limited experience with unrelated third-party entities challenges the company's growth. Failing to establish itself as a developer or contractor outside its promoter group may constrain long-term growth and profits.The construction industry is cyclical and sensitive to changes in the economy and this could have a significant impact on its operations and financial results. Mr. Pravin Kumar Brijendra Kumar Agarwal, a promoter, is involved in a pending criminal proceeding with the Airport Police Station in Mumbai. Such proceedings may negatively affect his reputation and, subsequently, that of the business. The previous IPO filed by the promoter group, PKH Venture Ltd., was not subscribed and was subsequently withdrawn..Click on the attachment to read the full IPO report:.Garuda Construction and Engineering IPO: Financials, Key Risks And More, All You Need To Know.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Garuda Construction IPO - Issue Details, Financials, Peer Comparison, Strategies, Risks And More: DRChoksey

The Rs 264.1 crore IPO open on Oct. 08 and the company has fixed the price band in the range of Rs 92-95 Apiece.

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Garuda Construction IPO - Issue Details, Financials, Peer Comparison, Strategies, Risks And More: DRChoksey

The Rs 264.1 crore IPO open on Oct. 08 and the company has fixed the price band in the range of Rs 92-95 Apiece.

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