The company has shown improvement in margins and return ratios. However, investors should be mindful of certain risks including geographic concentration and rising receivables. Given these factors, the issue looks suitable for long-term investors with a high-risk appetite.
Ellenbarrie generates over 87% of gas sales revenue from oxygen and nitrogen. Its top 10 customers are located in east and south India, and five of its nine manufacturing facilities are based in West Bengal. This regional concentration means any localised economic, social, or political disruption could adversely impact operations.
AgenciesThe company will utilise IPO proceeds worth ₹104.5 crore to set up a 220 tonnes-per-day (TPD) air separation unit at the Uluberia-II plant. More than one-third of the revenue comes from either government or public sector undertaking tenders. This may result in revenue volatility. Trade receivables have increased-from 16.8% of revenue in FY24 to 26.8% in FY25-indicating longer collection cycles that could put pressure on cash flows.
Revenue grew by 23% annually to ₹312.1 crore while net profit nearly trebled to ₹83.3 crore between FY23 and FY25. Ebitda margin) expanded to 35.1% from 16.4% during the period. Return on equity nearly doubled to 16.9%. However, the net debt-to-equity ratio rose to 0.32 in FY25 from 0.01 in FY23, due to capacity investments. Of the fresh issue proceeds, ₹210 crore will be used to prepay existing borrowings, which were ₹264.2 crore at the end of April.
The company demands a P/E multiple of 67.8 considering FY25 earnings. This is lower than Linde India‘s P/E of 147. Linde reported revenue and net profit of ₹2,485 crore and ₹455 crore respectively and Ebitda margin of 30.8% for FY25.