IPO Analysis of HRH Next Services

What they Do?

Business process outsourcing company HRH Next Services Limited provides chat, email, voice, and backend support, among other services.

What are the clients of HRH Next Services Limited? 

What Services the HRH Next Services Limited Provide?

HRH Next Services Limited Financial Summary

Analysis

Between March 31, 2022, and March 31, 2023, HRH Next Services Limited's profit after tax (PAT) climbed by 273.85%, while the company's sales increased by 15.73%.    

1. Assets: HRH Next Services Limited experienced steady growth in assets from 1,298 lakh to 3,114 lakh over the past three fiscal years, the PPE increased consistently from 2,40,72,711 to 5,00,09,070, suggesting ongoing investments in tangible assets for the company's operations or expansion.
Concern: The Intangible assets experienced significant growth from 2,73,31,343 to 8,16,34,596. The company already had 5,25,84,636 worth of intangible asset then on 1-4-22 the gross value of additional purchase was 5,01,52,441 which as of 31-3-23 worth gross 10,27,37,077. On the 31-3-23 the payment for the intangible assets was 1,39,69,505

2. Revenue: While the company witnessed robust revenue growth from 2424 lakh to 5125 lakhs during 2020-2023, a notable decline in revenue was observed in the latest reported period (2022-2023), as of 3103023 the revenue from operations are 99.78% ofo the toal revenue which is great indication of the core of the business.    

3. Profit After Tax: HRH Next Services Limited's profit after tax surged from 25 lakhs to 348 lakhs, showcasing a substantial improvement in profitability over the last three years, with a slight dip observed in the most recent fiscal period, necessitating a concern of cost structures and operational efficiency.    

4. Net Worth: The company's net worth demonstrated consistent growth from 604 lakhs to 1,321 lakh, underscoring sound financial health and shareholder value creation, warranting continued attention to sustaining this positive trajectory.   

5. Reserves and Surplus: Despite a dip in the reserves and surplus from 677 lakhs to 666 lakhs in the latest reporting period, HRH Next Services Limited should assess the factors influencing this decline to maintain financial resilience and strategic flexibility.    

6. Total Borrowing: A careful evaluation of the increase in total borrowing from 402 lakhs to 1,084 lakhs is essential, considering potential implications on the company's debt servicing capability, liquidity position, and overall financial risk management.

HRH Next Services’ Key Performance Indicators

HRH Next Services IPO Peer Comparison

Analysis

1. The HRN next Services limited reported EPS(basic) is less than the average but 2nd best after the Plantinumone Business Services Limited. Doesn’t necessarily mean of bad indication because the no. of share outstanding is different from company to company.

2. The HRN next Services limited reported NAV is less than the average of peers and the 3rd best in peer comparison.

3. P/E of the IPO company is least of all which is good indication because the company is less costly compare to their peers and expressing being undervalue.

4. The RoNW of the HRN next Services limited is the greatest of peer comparison and more than twice the peer average, which indicate the company has efficient return on the company’s net worth.