Should tega Industries hold or sell after IPO listing

 Should you buy tega Industries stock for long term?

Tega Industries Ltd, One of the companies whose business model is very impressive. To raise money from the Indian market, the company had brought its IPO at a very good price and the company's IPO also got a lot of response. Talking about the company's products and services, Tega Industries probably has the most unique business model in the engineering sector. The company is offering different PRODUCTS & SERVICES to its clients who include Conveyor Belts Cleaners & Accessories, Trommel, Slurry Transportation, Tega Dynamax, Wear Resistant Linear, Hydrocyclones etc. Products & Services are with Tega Industries which is engaged in the Engineering of its Cleaners. Offering services to all those clients who are in the sector. Company products are more in demand in consumables required in the mines and mineral processing industry. Tega Industries most of the products include chutes & its liners, trommels, grinding mill liners and screens, pumps, hydrocyclones, flotation parts as well as conveyor products. Tega Industries product range more value in & engineered with a combination of mineral processing engineering, mechanical engineering and material sciences with expertise in tribology.

Tega industries business model looks very good and it will always be in the demand. Before reaching to conclusion to hold or sell Tega industries, we have to understand the positive & negative points of the Tega industries.

Question:

What are the positive points of Tega Industries?

Answer:

1) Tega industries has very long track record where management of the company derived its operations very smoothly & with transparency. Tega group has established in 1976 but after two years of establishment in 1978, company had started its operations in India with foreign collaboration with Skega AB, Sweden. After 23 years of collaboration with Skega AB, Sweden, In 2001 Company management had acquired entire equity stake of Skega AB. It proves quality management skills & long vision thinking of the company management.

2) Tega industries group has strong presence of its business in the overseas Countries like Chile, Africa, and Australia etc. Losugen pty ltd (Australia), Hosch equipments, Tega Africa, Tega industries Chile are the well known industries of tega group out of India.

3) Chairman of Tega group Mr. Madan Mohanka & his young Son mr. Mehul Mohanka, both has very good reputation in the corporate. Moreover Mr. Mehul Mohanka came up with young & modern thinking, which is helping the Tega group for more expansion of its business.

4) Tega Industries IPO price band was in the range of 443rs to 453rs, which was really very impressive as per our calculation. We can say that Company management has left more profit on table for company shareholders after its IPO listing.

5) In the Mining Sector, Tega Industries Supplies all type required equipment's which will give strong grip to the company business model in the future also. We can say that in the mining & engineering sector company may lead in the future.

6) There is no Debit on the company as of now & After Raising funds from Indian market through IPO, It may help company to sit on Cash. Even It will give more confidence to company management for expansion with its own money.

7) Company products sales contribute nearly 92% & Company engineering & other services contribute nearly 2% to its business & remaining operating revenues comes from other company operations

8) Tega Industries had received bids 17.04 times in the retail category & in 3.35 times in QIB segment and 20.48 times in NII segment. It also shows Tega Industries demand of the stock by all type of investors. It gives more confidence.

Question:

What are the negative points in Tega Industries?

Answer:

Tega Industries company size is small even Company has long track record in the business but still management could not do more expansions & could not increase the size of the company. Company management has to prove in the future that they can increase the size of the company because after becoming public ltd company or coming into the stock market every company will be in the eye of the investors & traders.

As of now Tega Industries has more positive points Instead of negative points.  Now Let us discuss some Financials of the Tega Industries.

 Tega Industries Financials:

Sales of Tega Industries

If we will calculate the financial year’s 2021 sales of the company then it Looks Company had generate more business by exporting its products i.e nearly 85% in overseas which includes north America, south America, EU, middle east, Russia & Australia etc. Higher percentage for exporting company products is in Africa  which is nearly 23% followed by south ,north America , Middle East, Russia, Australia & EU i.e nearly 20%, 14% & 16% to 10% Approximately. Company top 8 customers had generated its 30% business in FY21 & remaining customers had generated 40% business for Tega Industries.

Current Installed Capacity of Tega Industries:

Currently Company has nearly 25k MTPA installed capacity. As per the FY20 results declarations, Tega Industries had only used more than 55% of its total Installed capacity.  

Total Assets of the tega Industries:

We will calculate only last two years assets of the tega Industries. In FY20 total assets of the company was nearly 887cr which had increased in FY 21 i.e nearly 1020cr.

Total revenues of tega Industries:  

As per our calculation, Tega Industries had reported nearly 696cr total revenues in Fy20 & in FY 21 total revenues were nearly 855cr.

Profit after tax of tega Industries:

Tega Industries had reported profit after tax in FY 20 was nearly 65cr & In FY 21 tega industries profit after tax had jumped to nearly 136cr. Which was extremely good performance by the company. If we will calculate operating profit margins of the company then it was nearly 24% against net profit margins of nearly 16% in FY21 Company had reported earnings per share nearly 20rs & Coming up with the P/E ratio of 22 against the Industry P/E ratio of 32.

Question:

What are the long term targets of Tega Industries?

Answer:

After carefully analysis of the Tega Industries financials & growth rate, Our recommendation on Tega Industries will be of “Buy”. We are bullish on Tega Industries for long term point of view even after its IPO listing. As per grey market, Tega industries share is trading above 410rs premium price from IPO price of 453rs on higher price band. Even we cannot promise on the grey market premium because it may increase or decrease. But still we are bullish on “Tega Industries stock for long term point of view. Investors may buy the stock even after its listing if they get chance to buy after some profit booking in the stock.

Long term Targets of Tega Industries after IPO listing:

If Investors had not get shares allotment in the IPO then new investors can start accumulate the Tega industries in small number of sets for long term targets of 850rs+.

Question:

What is the best strategy to trade Tega Industries after is IPO Listing?

Answer:

If Investors will get bumper returns on listing of Tega industries IPO & stock will lock into the upper lock then keep stop loss of 5% from the day circuit & carry the trade. Try to lock your profit on higher levels and take new entry on lower levels for investment point of view for 1 to 2 years at least.  

Question:

Should you sell Tega Industries?

Answer:

After the Listing of Tega Industries IPO we will recommend the IPO investors to trail stoploss as we suggested above and keep hold Tega Industries stock even after its listing. New investors can buy Tega Industries stock with strict stoploss of 5% to 8% for longer term point of view. Should you hold or sell Tega industries then answer is hold it into your portfolio & trail stop loss.