Ceigall India Listing News :The stock of infrastructure construction company Seagull India Limited got listed in the stock market today. However, the listing of the stock has been slow amid the sell-off in the market. It got listed on the BSE at a price of Rs 413 as compared to the IPO price of Rs 401. That is, those who got shares in the IPO got 3 percent listing gain. After listing, it reached Rs 425 and then came down to Rs 406. The question arises that what strategy should be made for this stock after listing. Should it be retained or sold.
What position to maintain
Swastika Investmart’s Head of Wealth Shivani Nyati says that Seagull India focuses on specialized infrastructure projects. It had a slow start on the stock exchange and was listed on the BSE at Rs 413. The listing price is slightly higher than the issue price of Rs 401. Whereas the IPO received 14 times subscription. In this sense, the listing of the stock has been weaker than expected. One reason for this is the huge fall in the market today.
The company’s strong focus on specialized infrastructure projects and efficient execution model remain its key strengths. However, the moderate listing highlights the challenges posed by its significant contingent liabilities, dependence on government contracts and strong competition. However, Seagull India shows the ability to effectively manage these challenges in the long term. Investors are advised to hold their positions with a stoploss of 378.
Understand the company’s outlook in 10 points
1. The brokerage says that based on a three-year CAGR in revenue till FY24, Seagull India is one of the fastest-growing EPC companies.
2. The company has a strong order book spread across different business sectors and geographical regions, which allows them to pursue a large range of projects.
3 The company’s business volume and profit margin are increasing.
4. According to the brokerage, the company’s strong order book, efficient business model and execution capabilities place the company in a position for sustained growth.
5. The financial performance of the company is continuously improving and its position in the sector is also continuously strengthening.
6. The company follows an asset light model. One of the fastest growing EPC companies with 20 years of experience.
7. Expertise in executing specialized structure projects of various sizes.
8. It has strategically bid for projects, leveraging its experience in the roads and highways sectors to expand its portfolio in other sectors.
9. Ensuring better fixed asset turnover ratio and strong relationship with lenders helps in getting timely financing with competitive terms whenever required.
10. Seagull will continue to maximize revenues with its multiple projects and increase profit margins and return ratios over the next few years.
(Source: Brokerage House Anand Rathi, Swastika Investmart, Reliance Securities)
What are the risks with the company
According to brokerage house Swastika Investmart, significant contingent liabilities, dependence on government contracts, high working capital requirements and tough competition pose major challenges. The IPO is priced at 20.7 times P/E. Although the company has strong growth prospects, there are some risks too, due to which one should subscribe with caution.
(Disclaimer: Investing or selling stocks is advised by the brokerage house. These are not the personal views of Financial Express. There are risks in the market, so take expert advice before investing.)
