ITCONS E-Solutions IPO Review – Profit, Estimates, Valuations – IPO Watch

ITCONS E-Solutions Limited is a New Delhi-based human resource services provider company. They are one of the best professional staffing and recruitment firms and growing across Pan India. The company has headquartered in Noida, incorporated in 2007. They provide Long-term or Short-term staff Augmentation Managed task contracts or Contingent employment/staffing solutions to their clients.

The company has a 360-degree presence in the industry and offers services to public and private sector organizations. Their main domains are Staffing, Manpower Supply, Recruitment Services, and Manpower Outsourcing. The company offers services to the sectors like Information Technology, Healthcare, Manufacturing, Oil and Gas, Engineering, Logistics/Transportation, Light Industrial, Media, Finance, Accounting, Administrative Services, Clerical, Marketing, and Creative, as well as State Government, Central Government and PSUs.

ITCONS E-Solutions has over 1000 team members including contractual employees. They offer end-to-end HR needs to their clients. Some of their marquee clients are Wipro Technologies, Central Warehousing Corporation (CWC), Municipal Corporation agencies of Maharashtra Govt., L&T Infotech, M-Source, HCL Technologies, HCL Infotech, Mindtree, TVS Electronics, Xebia, CMS, Infinite computers Solutions, Collabera Technologies, Tech Mahindra etc.

Public Offerings

ITCONS E-Solutions is coming up with a BSE SME IPO that will open in February 2023. The company is to raise ₹8.67 crores (1,700,000 equity shares) via IPO at a price band of ₹51. The ITCONS E-Solutions IPO lot size is 2000 shares. A retail-individual investor can apply for up to 1 lots (2000 shares or ₹102,000).

The company was promoted by Mr. Gaurav Mittal and Mrs. Swati Jain. The pre-issue holding of the company is 89.67%. The lead manager of the company is Finshore Management Services Limited and the registrar is Cameo Corporate Services.

The objectives of the issue as per the DRHP is to meet the working capital requirements, meet the Issue Expenses, and General Corporate Purposes.

Financial Performance

ITCONS E-Solutions financial performance (Consolidated)

(Amount in ₹ Lakhs)

ITCONS E-Solutions has had good financials for the last few years. The revenues are ₹ 834.95 lakhs in 2020, ₹ 842.48 lakhs in 2021 and ₹ 1,820.36 lakhs in 2022 as of March 31. In the next six months (till September 30), the total income of the company is ₹ 1605.05 lakhs with PAT of 106.12 lakhs. Similarly, in the previous year, the company’s EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) peaked at 2,195.96%, while there was a 137.02% rise in its net worth during FY2022, with total assets increasing by 48.22% along with a decrease in liabilities of around -8.67%.

The company looks strong as per the financial results compared to the last few years.

Objectives and Valuations

The company’s EPS is 4.16 in FY 2022 against 0.26 in FY 2021. The RONW is 55.31% in FY 2022 against 7.22% in FY 2021. The NAV was reported at 7.80 in FY 2022. As per the valuations, the company growth is looking strong in the coming years.

The Peer Group is ANI Integrated Services Limited, Integrated Personnel Services Limited and Quess Corp.

Conclusion and Recommendation

ITCONS E-Solutions has 15+ years of experience in the industry. As per company’s financial reports and the valuations, the IPO will be a good to go with the price band of ₹51. The IPO price is good compared to the listing peers despite the P/E for ITCONS is 21.53 which is minutely on a higher side against the peers (ANI P/E = 20.42; Integrated Personnel Services P/E=20.20; Quess Corp P/E =21.33); the sector P/E is 37.45. ITCONS NAV is looking good with EPS to increase in coming years. We recommend the investors to Apply the IPO with Mid to long-term views.