Hemant Surgical Industries Limited

Stock Opportunities Untested - but worth a good look
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Hemant Surgical Industries Ltd. (HSIL) - New SME IPO with Market cap of Rs. 94 crores.

It is in the business of manufacturing/importing/assembling and marketing a comprehensive portfolio of medical equipment and disposables.

Its product offerings cover a wide spectrum of equipment and disposables required for (i) Renal Care, (ii) cardiovascular disease (iii) respiratory disease, (iv) Critical Care and Radiology and (v) Surgical disposables.

It is a new SME IPO which is yet to list on the exchanges.

Raising 25cr -All fresh issue (No OFS)

Post IPO - Promoter holding at 74%

Impressive Last 3 year performance -
Debt down from 15cr to 7cr

Revenue up from 60cr to 112cr

PAT up from 1cr to 8cr
PAT margin from 1% to 7%

IPO valuation - very reasonable at 12x PE multiple.

ROCE and ROE at 32% and 38% respectively

Found one old credit rating report which gives some information on the company- https://www.icra.in/Rationale/ShowRationaleReport?Id=112211

At IPO price - it will be at Rs. 94 crores of Market cap

I am more attracted with the numbers for last 3 years and ROCE of 32%

Please add further if anyone have further information.

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As of 24th August 2023:

Hemant Surgical Industries Ltd. It is a 262 Cr market cap company as of today and quoting at a PE of 34 and price to sales of 2.4

Company is profitable with positive cash flow from last 3 years. As name indicate it is in business of importing and manufacturing medical equipments. Incorporated in 1989 and currently run by second generation entrepreneur. They have technical collaboration with JMS (Japan) and initially importing the equipments and selling in India :india: but now they are manufacturing the products and selling and having benefitted by make in India and PLI scheme. Future is looking great and company having potential to grow further.
Opportunity is looking like a small fish in the big pond.
Currently 51% of revenue is coming from manufacturing going forward this percentage will increase further and margin will also improve in this process.

Some key financials:
ROCE: 45%
ROE: 41%
PEG ratio: 0.65

Last FY sales: 109 Cr
Net Profit: 8 Cr
OPM:10%

The stock is listed in BSE SME platform and trading in lots, lot size: 1600

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I basically did read this company as part of understanding the Medical device segment in India. There are 100% FDI, PLI and Government intent to get medical devices manufactured in India but as of now India produces low value commodity products in India and the rest are distributed by importing.

My understanding of the company is as follow

  • Company is the distributor for the foreign products - new and refurbished.
  • They do few assemblies in India but no value-added manufacturing.

I did not dive deep into the company as I could not find any attractiveness in its business - they are one among the distributors and products they sell do have a lot of players in the market.

In case you are checking in more detail do check if they are planning to enter move value added manufacturing in coming years.

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Has anyone analysed Saakshi medtech…latest IPO SME… seems like they have promising future in medical devices and electronic panels

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Have done some research, please read and add.

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Wiring harness is captive only, And medical devices they haven’t really started much in it… it’s mostly panels for xray machine i believe… Majority of the business currently is for panels.

Sharing some findings befor i invested in the IPO:

Jo MTAR - Bloom Energy ka relation hai …waise hi kuch

Sakshi - General Electric ka lag raha hai.

Founder is also an ex employee of GE. More you read about this company more interesting it seems.

21 years of working experience.
Products division:

Healthcare
Control Panel
Locomotive
Wire Harness

Major ClientS:
GE - plans to divest non-core business and focus more on industrial business - like aviation, healthcare, and renewable energy.,

Baker Hughes ( formerly a GE company) - into oilfield exploration and drilling (growth prospects increases with rising crude,

Kirloskar,

Wipro+GE JV - specializes in medical imaging and diagnostics - among prominent players who are exporting medical devices.

-The medical devices market in India was estimated to be US$ 12 billion in 2020, but it has the potential to reach US$ 50 billion by 2025.
-Diagnostic imaging is expected to expand at a CAGR of 13.5% between 2020-25.
-The sector includes large multinationals and small to mid-sized companies, offering opportunities for domestic players to penetrate global markets.
-Government initiatives, research and development (R&D) focus, and 100% FDI are supporting the growth of the medical devices sector.

Wabtec (Locomotive) - Wabtec operates under two financial reporting segments: Freight segment, which includes Equipment, Components, Services and Digital Intelligence; and the Transit segment, which includes Equipment and Aftermarket Services

All sectors they are working in have huge potential. Very interesting company.

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