Supreme Power Equipment IPO Financial Analysis

What Supreme Power Equipment Ltd. Do?

Power transformers, generator transformers, windmill transformers, distribution transformers, isolation transformers, solar transformers, energy-efficient transformers, converters, and rectifier transformers are just a few of the transformer types Supreme Power Equipment Limited manufactures, upgrades, and renovates.

What are Supreme Power Equipment’s Product Portfolio Include?

Financial Summary

Analysis

1. Assets: The company's total assets increased significantly from ₹6,901.04 to ₹9,187.16 between March and July 2023, suggesting potential business expansion or asset acquisition during this period.

2. Revenue: There is a substantial decrease in revenue from ₹9,990.85 to ₹3,927.61 between March and July 2023. This decline may raise concerns about the company's sales performance and necessitate an examination of factors influencing the revenue decrease.

3. Profit After Tax: The Profit After Tax (PAT) declined from ₹1,107.88 to ₹503.16 between March and July 2023. This decrease in profitability may be attributed to the lower revenue or increased expenses, warranting further investigation into the company's cost structure and operational efficiency.

4. Net Worth: The Net Worth increased from ₹1,805.69 to ₹2,298.26, indicating positive growth in the overall value of the company. This rise could be due to retained earnings, capital injections, or a combination of both.

5. Reserves and Surplus: Reserves and Surplus also experienced growth, moving from ₹1,409.89 to ₹1,902.46. This suggests that the company has been able to set aside more funds for future needs, indicating a favorable financial position.

6. Total Borrowing: The Total Borrowing increased from ₹1,999.74 to ₹2,153.82. While the increase in borrowing may be a strategic move for expansion or investment, it is essential to assess the company's ability to manage its debt levels and the purpose behind the borrowing.

In summary, the company witnessed notable increases in assets, net worth, and reserves, but experienced declines in revenue and profit after tax. A comprehensive analysis should consider the reasons behind these changes and their implications for the company's overall financial health and strategic direction.
 

Supreme Power Equipment IPO Peer Comparison

Anslysis

1. Supreme Power Equipment Limited demonstrates a robust EPS of 6.08, outperforming peers Transformers & Rectifiers (India) Limited and TD Power System Limited. 

2. However, its P/E ratio of 59.88 is comparatively higher, indicating a potentially higher valuation. While its RoNW of 65% is commendable, investors may note a lower P/BV ratio of 1.42 compared to the peer average, suggesting a difference in market valuation. 

3. Investors should interpret these metrics cautiously, considering both strong earnings and the premium valuation associated with Supreme Power Equipment.