Krystal Integrated Services IPO Review
Krystal Integrated Services IPO Review: Krystal Integrated Services is facing an IPO issue of Rs. 300.13 Cr opens on March 14, 2024. The issue closes on March 18 and will be listed on the exchange on March 21, 2024. In this article, we analyze the strengths and weaknesses of Krystal Integrated Services Limited IPO Review 2024. Keep reading to find out. outside!
Krystal Integrated Services IPO Review – About Us
In addition to these services, the company also provides production support services, warehouse management and airport management services, including multi-level parking and airport traffic management services. In staffing services, the company provides payroll management, private security services and catering services.
The company operates on a business-to-business (B2B) model across 16 states and two union territories in India. To date, we have served 135 hospitals and medical schools, 228 schools and universities, one airport, four train stations, and more than 30 subway stations.
Notable organizations where Krystal has provided services include Maha Mumbai Metro Operation Corporation Ltd and Brihanmumbai Municipal Corporation. The company sources everything from the OEMs themselves and provides customized solutions to these organizations that maintain long-term relationships with the companies.
Krystal Integrated Services IPO Review – Industry Intelligence
The global outsourced facilities management market is valued at USD 890 billion in 2022, growing at a compound annual growth rate (CAGR) of 2.1% from 2018 to 2022. Asia is the world’s largest market with a 33% share as of 2022. China and India are expected to be the main growth drivers, reaching USD 479.6 billion by 2027, at a CAGR of 10.6%.
Industry, Public Administration, Defense and Railways are the three top user segments in the integrated facilities market in FY23, accounting for a total market share of 53.1%. Other key sectors include commercial offices, healthcare, educational institutions, airport retail and residential sectors.
The Indian integrated facilities management market is highly fragmented with around 400-500 companies operating across the country. There are about six large companies in the Tier 1 category, which have presence across multiple geographies and control about 9.4% of the total market.
Tier 1 companies serve virtually all end-user segments nationwide and have a broad customer base. About 60 to 70 companies fall into Tier 2 and operate regionally, while more than 400 companies fall into Tier 3 category and operate in small geographic areas such as a single city or town.
The market also witnesses the presence of both international and domestic companies. International companies subcontract most of their services to access the region’s diverse markets, workforce, and customers.
Krystal Integrated Services IPO Review – Finance
During the 23 fiscal year, the company earned a total revenue of KRW 150 million. 708 Cr, up 28% from Rs. 553 Cr in FY22. Since fiscal 2021, the company’s revenue has increased 23%. Krystal Integrated Services earns nearly 38% of its revenue from the Healthcare segment, which is also growing at a compound annual growth rate (CAGR) of 29% since FY21.
Education accounts for 21% of revenue, while airport, rail and subway infrastructure accounts for about 7% of revenue. The company’s net profit increased by 46% to 5 billion won. 26 Cr in FY22 to Rs. 38Cr in FY23. Net profit increased significantly from 85.3% in FY22 to 83.65% in FY23 due to lower employee costs as a percentage of revenue.
The company operates on single-digit margins of 6 to 8 percent because it uses contract workers to serve its customers. Net profit margin improved from 3.5% in FY21 to 5.4% in FY23.
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Krystal Integrated Services IPO Review – Key Players
In terms of peer-to-peer (P2P) analysis, Krystal Integrated Services is the smallest listed peer in terms of revenue. Quess Corp and SIS Ltd are industry leaders. However, the industry leaders’ return on equity is not as high as Crystal’s, at 24%. If the company continues to expand its profits further, we expect to learn more about RoNW.
Nonetheless, it has a higher price range of Rs. 715 compared to the underlying EPS of Rs. 33.33, the company’s price-to-earnings ratio is evaluated at 21.45 times, which is much higher than the average PER of 15.16 times for its peers.
Company Strengths
- Comprehensive range of solutions: The company offers a variety of solutions across a variety of business sectors. This allows Krystal to serve a wide range of customers.
- Focused business model: The Company’s business is typically focused on developing deep, strong relationships among a small number of large customers. We also have a track record of successfully fulfilling and executing very large orders.
- Extensive reach across India: As of September 2023, the company served more than 2,160 customer locations across 16 states and two union territories. This allows companies to outsource work and deploy staff across the country.
- Strong Performance: The company’s performance is supported by strong financial performance over the past three years. Net profit increased by up to 40%, with sales increasing by 20% and margins expanding.
company’s weaknesses
- Customer concentration risk: The company’s top five customers account for 35% of its revenue, and its top 10 customers bring in more than 60% of its revenue. This exposure to your biggest customers can be detrimental to your bottom line if you lose those top customers.
- Exposure to government contracts: A significant portion of the company’s revenue, approximately 74%, came from government contracts it received. Companies must maintain an appropriate balance in both government and non-government contracts.
- Geographically concentrated risk: Although Krystal operates in 16 states, approximately 80% of the company’s revenue comes from only two states in India: Maharashtra and Tamil Nadu.
- Operational risks due to the inherent nature of the business: The tasks performed by the company, such as personal security and facility management, depend on the performance of the company’s personnel. However, any resulting disruptions or glitches can have financial and reputational implications for the company.
Krystal Integrated Services IPO Review – GMP
As of the writing of this article, the Gray Market premium for Krystal Integrated Services Ltd stock has not yet been disclosed. We will update the article with our respective expectations as soon as GMP is updated.
Krystal Integrated Services IPO Review – Key Facts
promoter: Prasad Minesh Lad, Neeta Prasad Lad, Saily Prasad Lad, Shubham Prasad Lad and Krystal Family Holdings Pvt Ltd.
Book Operations Lead Manager: Inga Ventures Pvt Ltd.
Proposal registered by: Link Intime India Pvt Ltd
purpose of the problem
- Rs 10 will be utilized to repay the loan.
- Rs, 100 Cr will be utilized towards the working capital requirement of the company.
- Rs 10 Cr will be utilized for purchase of new machinery.
- The remaining amount will be used for general corporate purposes.
conclusion
Krystal Integrated Services is a contract-based management outsourcing company that provides comprehensive human resources solutions. The company is an organized giant with strong financial performance in a somewhat unorganized and fragmented market.
Although Krystal Integrated Services has a broad service offering, a focused business model and a strong presence across India, it also faces certain weaknesses. These include customer concentration risk, exposure to government contracts, geographic concentration, and operational risks based on the nature of our business.
Overall, the growth opportunities for the business look quite bleak as they are entirely dependent on the growth of the overall industry, which is currently growing at a very slow pace. So what do you think about the company? Let us know in the comments below whether you would file for or avoid the Krystal Integrated Services IPO.
Written by Nasir Hussein
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