Friends a new IPO is coming. A company named Nureca Ltd and before investing there are a lot of things to keep in mind for you investors. Henceforth knowing that we bring a article before every IPO where we tell you about the company, the industry, the company financials and its pros and cons. Let's start our discussion about Nureca Ltd and what this IPO consists of.
Nureca IPO: Upcoming IPO 2021 - In this Nureca Limited IPO review, we have spoken about the Nureca's IPO launch date, News, Price, Price Band, Lot Size, the Business model and its Financials in detail.
So let's start our article by first talking about the company's business and where it generates revenue following about the industry. Nureca Ltd is a B2C company which means that it sells its products directly to the consumer and this company manufactures home, healthcare, and wellness products and supplies directly to customers.
Now let's try understanding home healthcare. Assume someone has a long term illness that has to be tracked at home or have to change their lifestyle or to track their health they need different products and there are a lot of illnesses which are long term where these products are used to monitor there lifestyle and health and this is where this company comes in picture and sell there products Nureca says that it believes in innovation and the home wellness market which is growing wants to fulfill customer needs and make their products according to customer requirements and improve people's lives.
Nureca IPO - Nureca Limited IPO Review
If you look at Nureca they have mainly three brands under which they have been selling there products DrTrust, TRUMOM, and DrPHYSIO. Now I'll talk about Croma. Now you'll be thinking why did I suddenly shifted from Nureca to Croma If we talk about Croma, it is an omnichannel electronic retailer of Tata which means it sells its products online and offline.
So in Oct 2019, Nureca had a deal with Croma due to which they were able to sell their products online and offline Whenever a reference is made about a B2C company, it is important to know about its distribution channels If we talk about Nureca, its the first digital company in its sector to sell its products online, offline, through retailers and through distributors Other than this, the company has a dedicated website, drtrust.in through which they sell their products directly to customers.
The interesting fact here is that if we talk about the total sales of Nureca, 95% of the revenue comes from online sales which means the products sold online through e-commerce, that generates a total of 95% revenue Friends, due to the pandemic, the healthcare products used at home have seen a rise in demand due to which the sales of this company has seen exceptional growth in the past few months when the pandemic arrived but as the pandemic is going the growth of the company is still there but the numbers have normalized to the level before the pandemic.
But the pandemic coming, people have become more serious regarding their health due to which a rise in demand is seen After the company, let's talk about the industry. What is the whole industry about under which this company operates and where does the industry generates revenue and how many percent.
Nureca IPO - Nureca Limited IPO Details
If we talk about the equipment, the industry can be broken into three categories. This means the equipment is used mostly in three broad areas. First being therapy, second for diagnostic to diagnose illnesses, and third, is the most important mobility assistance. So whatever is made in this segment falls under these three headers. If we talk about the revenue out of the three headers, the biggest revenue comes from the therapy segment Data from 2019 shows therapy segment had 40% out of the total revenue Under the therapy segment, home respiratory therapy is a sub-segment where the most equipment is used.
Like some diseases named Asthma etc these products are extensively used in homes due to which under this segment this is the most important sub-segment in the recent past. After therapy comes the diagnostic segment, if we talk about 2019, the revenue of 35% used to come from this segment to the industry. which means it comes after therapy which had 40% revenue and this has 35% but this segment is important because growth under this segment can be seen significantly in the coming future. If I talk about diagnostic and the equipment used in homes like heart rate monitor come under this category. And after the pandemic, these products saw the best increase in growth. And as its being regarded that due to the pandemic people are more serious for their health, these products will see a rise in demand in the future.
The third segment which we talked about, the mobility assistance which contributes a total of 25% revenue in the segment. If we talk about mobility assistance, wheelchair, home medical furniture come under it. So friends all this information might be new to you, but you may have seen people getting more aware of this in recent times and this company is a brand that has been providing these products for some time. Soo friends after talking about the company and industry, I'll try telling a short brief about what the company makes and sells in the market. The first comes chronic device products under which BP monitors, oximeters thermometers and glucose devices have been sold by the company.
Second, comes orthopedic products under which the company sells different products After this comes mother and child products, nutrition supplements, and lifestyle products. This is where you'll get to know about what the company makes and sells and targets which segments through its products.
company financials
After this let's quickly talk about the company financials, the most important being the revenue and profit. The revenue of the company in 2018 was 20CR, in 2019 it was 61CR which means it rose almost 3 times.
In 2020, 99CR and up till Sept 30, the company has done sales worth 122CR which means the company has done more sales in half-year than last year From here you can make out that the company has done exceptionally well in a short period of time. After this if we talk about the profits of the company, in 2018 it was 3CR, in 2019 it was double till 6CR and remains same in 2020 and till 2021 financial year, the company has booked 36CR of profit which means 6 times of their last year profit which the company has booked in this half-year.
Company's latest net profit margin is close to 29%, but this number is exceptionally high soo lets talk about net profit margin till 31st march when it was around 6.43% because as I told you due to the pandemic there numbers rose exceptionally within some time.
The industry under which Nureca operates has an average PE ratio of 39 and if we see the company's trailing 12 months PE ratio it is 22 which means in comparison to the industry PE, the company's PE ratio can be considered low. After the financials, lets talk about the pros and cons of investing in the company, what can be the advantages and risks.
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pros
The first being the pros. In 2019 this industry was considered to be $5BN but is expected that from 2020 till 2020 will give almost 20% compounding growth. So a 20% CAGR is a big deal which can be the biggest pro to invest in this industry.
The second pro is increasing disposable income and people being conscious about their health, other than that friends right now the young population is of India but with time as average age grows, the number of old people is also growing due to which the demand for these products will increase in the recent future.
If I talk about the third pro, the company sells most of its products through its own website, other than this 95% of total revenue out of total comes from online sales and as the brand grows the company sells its products through its own website which reduces its dependencies on distributors or retailers due to which the operating profit margin in the coming time can remain good.
Next, if we talk about the industry in which the company operates, there is no established competition meaning no branded players who sell these products or equipment due to which the company gets an edge in their business.
cons
After this let's talk about the cons. The first con being the company depends on third party manufacturers for their products and the third parties which manufacture under this industry should have regulatory compliances and FDA approvals are very important. If tomorrow anyone one of those companies comes out of the approvals, it would be a problem for this company too.
If I talk about the second point, the trade receivables of the company are high meaning in simple language Suppose I sell one thing in 100 RS today and the person who I sold it to has not given me money soo every company reports its trade receivables may it be a listed company or an upcoming IPO, so the TR of this company is high as compared to their revenue, soo in the coming future we have to see how TR gets reduced because as soon as TRs get reduced the company would recognize its revenue and the company would receive the cash. So it's very important for the company to maintain their TRs in a particular range.
So I would like to tell you the numbers in the company jumped but in the coming time that number can stabilize soo set your expectations according to that and try getting to know the genuine growth in the coming time.
Share Price and Launch Date
After the pros and cons, let's talk about the important dates and numbers which are important to apply for an IPO. The company's IPO will be open from 15th Feb to 17th Feb when you can go and bid.
IPOs price
Nureca IPOs price is in the range of Rs 396 till Rs 400 and to bid one lot you need to buy a minimum of 35 shares. If we talk about the listing, it will be listed on both NSE and BSE in the near future.
So friends this was our video on Nureca IPO and I hope that you liked it, if you liked it please like the video, comment if you should bid on this IPO or not Friends, it's a new industry soo it may be complicated to understand but if you try researching you'll get to know that in the long term how the company would perform.
We bring all article for educational purposes. We don't give any buy/sell recommendations of any stock. Before investing in any stock, do your own research and then invest in the long term.
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