Please refer to important disclosures at the end of this report

1

Incorporated in 2001,

Antony Waste Handling Cell Limited (AWHCL) is engaged

in offering Municipal Solid Waste (MSW) management services. The service

range of the company includes solid waste collection, transportation, processing

and disposal services to Indian municipalities. It has in-

house expertise in landfill

construction and management sector.

Positives: (a) Presence in the fast-growing MSW management industry with end

-

to-

end capabilities; (b) Strong track record of project execution; (c) Long term

contracts with municipal

ities; (d) Experienced promoters and management team

with strong domain expertise.

Investment concerns: (a) AWHCL reported poor consolidated top-

line (CAGR of

~1% over FY2017-19), while bottom-line reported de-

growth over the same

period, hence growth conc

erns remain; (b) This business involves receivables risk

from municipalities, which can lead to financial instability of the company. This

also restricts further investment in asset development.

Outlook & Valuation: AWHCL was unable to performance on top-line & bottom

-

line fronts over FY2017-

19, and hence we believe that concerns regarding the

company’s financials exist. Further, the business involves

working capital and

receivables risk from municipalities, which restricts the future growth

opportunities. Despite the lower pre-issue P/E at 10.1x 1HFY20

20 annualized

earnings (at the upper end of the issue price band), we

recommend NEUTRAL

rating on the issue.

Key Financials

Y/E March (Rs cr)

FY2017

FY2018

FY2019

1HFY20

Net Sales

276

284

219

% chg

-

0.1

2.7

-

Net Profit

41

40

34

38

% chg

-

(2.8)

(13.7)

-

OPM (%)

23.5

25.3

26.9

30.4

EPS (Rs)

16.0

15.6

13.5

14.8

P/E (x)

18.7

19.2

22.3

-

P/BV (x)

5.3

6.3

4.9

-

RoE (%)

28.4

32.8

21.9

-

RoCE (%)

18.9

24.5

19.7

-

EV/Sales (x)

3.2

3.1

-

EV/EBITDA (x)

13.8

12.1

11.6

-

Angel Research; Note: Valuation ratios based on pre-issue outstanding shares and at upper end

of the price band

Neutral

Issue Open: March 04, 2020

Issue Close: March 06, 2020

Offer for Sale: NIL

QIBs 50% of issue

Non-Institutional 15% of issue

Retail 35% of issue

Promoters 48.9%

Others 51.1%

Post Issue Shareholding Pattern

Post Eq. Paid up Capital: Rs13.4cr

Issue size (amount): Rs203cr - **Rs206cr

Price Band: Rs295-300

Lot Size: 50 shares and in multiple thereafter

Post-issue implied mkt. cap: * Rs789cr - **Rs803cr

Promoters holding Pre-Issue: 51.1%

Promoters holding Post-Issue: 48.9%

*Calculated on lower price band

** Calculated on upper price band

Book Building

Fresh issue: Rs35cr

Issue Details

Face Value: Rs.5

Present Eq. Paid up Capital: Rs12.8cr

Amarjeet S Maurya

+022 39357600, Extn: 6831

amarjeet.maurya@angelbroking.com

Antony Waste Handling Cell Ltd

IPO Note |

Waste Handling

March 03, 2020

Antony Waste Handling Cell Ltd | IPO Note

March 03, 2020

2

Company background

Incorporated in 2001, Antony Waste Handling Cell Limited is engaged in offering

Municipal Solid Waste (MSW) management services. The service range of the

company includes solid waste collection, transportation, processing and disposal

services to Indian municipalities. It has in-house expertise in landfill construction and

management sector.

The company is a part of Antony group, which has a diversified business model

including ancillary and automotive body-building industries. Antony Waste Handling

Cell Ltd has completed 25 projects for municipalities and private players till

November 30, 2018. The company mainly takes MSW processing projects, MSW

C&T projects, and mechanized sweeping projects.

Some of the major clients of the company are Municipal Corporation of Delhi

(MCD), Jaypee International Sports, and Kalyan Dombivali Municipal Corporation

(KDMC). Currently, the company has 515 vehicles whose components are obtained

from international suppliers named BUCHER Municipal AG and Compost System

GmbH.

Issue details

AWHCL is raising `35

cr through fresh issue & Private equity fund selling 57 lakhs

equity shares through offer for sale in the price band of `295-300.

Exhibit 1: Pre and post IPO shareholding pattern

No of shares (Pre-

issue)

%

No of shares (Post-

issue)

%

Promoters

13,075,780 51.1

13,075,780

48.9

Others 12,512,978 48.9 13,679,645 51.1

25,588,758

100.0

26,755,425

100.0

Source: Source: RHP, Note: Calculated on upper price band

Objectives of the Offer

 Reduction of the aggregate outstanding borrowings of the Company on

a consolidated basis (~`30cr)

 General corporate purposes, subject to the applicable laws.

Antony Waste Handling Cell Ltd | IPO Note

March 03, 2020

3

Consolidated Income Statement

Y/E March (` cr) FY2017 FY2018

FY2019

1HFY20

Net Sales

276

284

219

% chg

0.1

2.7

-

Total Expenditure

211

206

208

152

Raw Material

49

36

32

28

Personnel

61

64

66

44

Others Expenses

101

106

109

80

EBITDA

65

70

76

66

% chg

7.6

9.2

-

(% of Net Sales)

23.5

25.3

26.9

30.4

Depreciation& Amortization

11

13

18

11

EBIT

54

57

58

56

% chg

6.3

1.4

-

(% of Net Sales)

19.5

20.7

20.4

25.6

Interest & other Charges

25

23

25

14

Other Income

15

7

(% of PBT)

35.2

30.0

31.1

14.3

Recurring PBT

44

49

48

49

% chg

11.3

(

2.3)

-

Tax

3

9

13

11

(% of PBT)

6.3

18.2

27.8

22.7

PAT (reported)

41

40

34

38

Extraordinary Items -

-

(0)

ADJ. PAT

41

40

34

38

% chg (2.8)

(13.7)

-

(% of Net Sales)

14.9

14.4

12.1

17.4

Basic EPS (`)

16.0

15.6

13.5

14.8

Fully Diluted EPS (`)

16.0

15.6

13.5

14.8

% chg (2.8)

(13.7)

-

Source: Company, Angel Research

Antony Waste Handling Cell Ltd | IPO Note

March 03, 2020

4

Consolidated Balance Sheet

Y/E March (` cr)

FY2017

FY2018 FY2019

1HFY20

SOURCES OF FUNDS

Equity Share Capital

1

7

7.15

Reserves& Surplus

143

120

150

170

Shareholders Funds

144

121

157

177

Debt

139

111

136

150

Deferred Tax Liability

11

16

19

18

Minority Interest

39

49

56

66

Total Liabilities

282

302

368

411

APPLICATION OF FUNDS

Net Block

140

147

174

220

Capital Work-in-Progress

5

-

15

Current Assets

215

275

312

335

Inventories

0

Sundry Debtors

67

73

89

95

Cash

13

34

22

23

Loans & Advances

3

7

4

5

Other Assets

132

161

197

212

Current liabilities

86

132

149

175

Net Current Assets

129

143

163

160

Deferred Tax Asset

8

12

16

17

Mis. Exp. not written off

-

Total Assets

282

302

368

411

Source: Company, Angel Research

Antony Waste Handling Cell Ltd | IPO Note

March 03, 2020

5

Consolidated Cash Flow Statement

Y/E March (` cr) FY2017

FY2018

FY2019

1HFY20

Profit before tax

44

49

48

49

Depreciation

11

13

18

11

Change in Working Capital

(20)

(29)

(38)

(17)

Interest / Dividend (Net)

(0)

0

Direct taxes paid

(4)

(9)

(14)

(12)

Others

15

12

13

11

Cash Flow from Operations

47

37

30

42

(Inc.)/ Dec. in Fixed Assets

(44)

3

(63)

(57)

(Inc.)/ Dec. in Investments

18

11

9

4

Cash Flow from Investing

(26)

14

(54)

Issue of Equity

0

Inc./(Dec.) in loans

(17)

(10)

34

22

Dividend Paid (Incl. Tax)

(66)

(4)

(6)

0

Interest / Dividend (Net)

41

(16)

(10)

Cash Flow from Financing

(42)

(30)

12

Inc./(Dec.) in Cash

(22)

21

(12)

1

Opening Cash balances

32

11

31

20

Closing Cash balances

11

31

20

Source: Company, Angel Research

Antony Waste Handling Cell Ltd | IPO Note

March 03, 2020

6

Key Ratios

Y/E March FY2017

FY2018 FY2019

Valuation Ratio (x)

P/E (on FDEPS) 18.7

19.2

22.3

P/CEPS 14.7

14.6

P/BV 5.3

6.3 4.9

EV/Sales 3.2

3.1 3.1

EV/EBITDA 13.8

12.1

11.6

EV / Total Assets 3.2

2.8 2.4

Per Share Data (`)

EPS (Basic) 16.0

15.6

13.5

EPS (fully diluted) 16.0

15.6

13.5

Cash EPS 20.4

20.6

DPS 0.0

0.0 0.0

Book Value 56.4

47.5

61.5

Returns (%)

ROCE 18.9

24.5

19.7

Angel ROIC (Pre-tax) 20.2

28.6

22.6

ROE 28.4

32.8

21.9

Turnover ratios (x)

Asset Turnover (Gross Block) 2.0

1.9 1.6

Inventory / Sales (days) 0

0 0

Receivables (days) 89

96

114

Payables (days) 21

42

47

Working capital cycle (ex-cash) (days) 68

54

68

Source: Company, Angel Research

Antony Waste Handling Cell Ltd | IPO Note

March 03, 2020

7

Research Team Tel: 022

-

39357800 E

-

mail: research@angelbroking.

com Website:

www.angelbroking.com

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