Full Review of Standard Glass Lining Technology IPO

Verdict: Apply for Big Listing Gains and Hold for Long Term ✅

Management is Confident on Delivering 25% CAGR Revenue Growth for next 10 Years 🔥

Do Read till the End to understand the Potential of this company 👇

Business Overview
SGLT is one of the top five specialised engineering equipment manufacturer for pharmaceutical and chemical sectors in India

Company's portfolio comprises core equipments used in the manufacturing of pharmaceutical and chemical products. It includes (i) Reaction Systems (ii) Storage, Separation and Drying Systems and (iii) Plant, Engineering and Services

Company offers 65+ Products to its clients

Sector Wise Revenue Bifurcation (FY24)
Pharmaceutical: 82%
Chemicals: 13%, rest: 5%

SGLT is one of India’s top three manufacturers of glass-lined, stainless steel, and nickel alloy based specialised engineering equipment

Company has diverse customer base across sectors like  pharmaceutical, chemicals, paint, bio technology and food and beverages

Company serves 30 out of approximately Top 80 pharmaceutical and chemical companies in the NSE 500 index

SGLT has total 9 manufacturing Facilities (1 added last month only) situated in Hyderabad, Telangana
- Total Area covered is 5,42,000 Sq. ft.

few of the units are automated with Robots and advanced machineries are being used to carry out the operations

💠Upcoming Facilities 💠
▫️Capex of 40 Cr will be done in their existing facilities which is expected to get completed in next 6 months

Post this Capex, By existing 9 facilities, Company can grow its Revenue in next 5 years

▫️A New Greenfield Facility across 36 acres of land with 9 lakh Sq. Ft area will be developed, for that company has raised 130 Cr from AGI Japan

- This facility will be developed in phases and Phase 1 (3 lakh Sq. Ft area) will be completed in next 18 months

- Company will make products for industries like Heavy Engineering, Oil & Gas, edible oil etc from this facility

▫️Apart from that company will spend 15 Cr each year for next four years in Capex of their existing facilities. So total 100 Cr (40 Cr IPO + 60 Cr internal accruals) will be spent on Capex in next 5 years

- Company can make products for even semiconductor industry post Capex

💠Connection with AGI Japan💠

- AGI Japan and its affiliate GL HAKKO has invested around 200 Cr in SGLT and formed a strategic partnership

- AGI Japan will train employees of SGLT and hence company will get orders from Japan once their products gets approved

- AGI Japan provides conductivity glasses and Semi conductor Electromagnetic sortable low lien high corrosive glasses to SGLT and SGLT manufactures Glass lining conductivity Reactors and then AGI Japan sells those reactors under its own name

- After Tech Tie up with AGI Japan, SGLT has developed a Shall & Tube Heat Exchanger which will be launched in May 2025. Only AGI Japan has this Technology in the whole world. Company will manufacture 200 units of Heat exchangers every month

- SGLT has also partnered with an USA IPP which has 156k World wide Clients, due to this SGLT will get so many international clients and TAM will be huge

Objects of the Issue

1⃣ Capex: 40 Cr

- As mentioned above, company will use 40 Cr in both own and subsidiary company's Facilities for Capex by buying new machinery

2⃣ Debt Repayment: 130 Cr

- Company will repay the Debt of 130 Cr and hence It will become a Debt Free Company post IPO

3⃣ Inorganic Acquisition: 20 Cr

4⃣ GCP

Financials
Company's Financials are Good, There has been Steady Growth in their Revenue and Margins

Company had taken a high debt for Capex but that will be Paid off from IPO money. Receivables are increasing and so does inventory mainly due to Export focus

*Management has confirmed that they will do 650-670 Cr Revenue in FY25 and PAT Margins will be 12-13%, so company is poised to do 80-82 Cr PAT in FY25

Valuations

Company is coming at Attractive Valuations, company has some peers like GMM Pfaudler and HLE Glasscoat

But both are not exactly comparable with SGLT

PE Comparision (FY25)
Standard Glass: 34x
GMM: 36x
HLE Glass: 48x

FY26 PE Estimation for SGLT: 24x

SGLT should get high premium over its peer because of many reasons like their Growth Potential, AGI Japan Partnership. World wide Exclusive Product launch, Solid Expansion etc

I feel this company can even list double or become double shortly post listing

I see a huge upside potential in this company in long

Additional Points
- Management is Solid
- Anchor Book was Top Notch
- Demand is huge

Conclusion

I Extremely liked this company. Company is a turnkey solution provider to its clients and now SGLT will explore other sectors also

Company has tied up with the World's Largest Glass Equipment Manufactures AGI Japan and making some Exclusive products

Their new facilities will drive the Huge Growth for this company in coming 2-3 years. Management has said in interview that they will take International Revenue share to 15% in FY25 and 20% in FY26 which will Boost their Margins

Management is super confident on maintaining 25% CAGR Growth rate for next 10 years which is a Huge Statement

Hence a Very Solid one of its kind company with blasting Growth Potential is coming at Attractive Valuations

I am Applying with Full Force in this IPO ✅

Allotment will be very tough in this one, I will consider buying this post listing depending on valuations

(Note: This post is shared for Educational Purposes only, DYDD before applying)

#StandardGlassLining #IPO