Spray Engineering Devices Limited (SEDL), established in 1992 and headquartered in Chandigarh, India, is a technology solutions provider for the sugar and process industries, offering sustainable and energy-efficient engineering systems. Its services include turnkey projects for sugar mills and ethanol distilleries, evaporation and drying systems, zero liquid discharge solutions, water and wastewater treatment, and biomass-based energy generation systems. The company's clientele includes sugar manufacturers, ethanol plants, and agro-industrial processors across India and overseas. Promoters are Atul Sobti & Family.
**Financial Performance and Valuation:**
SEDL's revenue has grown significantly, from ₹111 Cr in FY21 to ₹547 Cr in FY24 (estimated). EBITDA increased from ₹13 Cr in FY21 to ₹87 Cr in FY24 (estimated), and PAT rose from ₹5 Cr in FY21 to ₹53 Cr in FY24 (estimated). EPS improved from ₹2.23 in FY21 to ₹23.56 in FY24 (estimated). The last deal price was ₹425 per share (April 24, 2025), implying a market capitalization of ₹1067 Cr. The P/E Ratio (FY24) is 20.12x, and the P/B Ratio is 7.99x based on a book value of ₹53.19.
**Shareholding Pattern:**
The shareholding pattern shows Mr. Vivek Verma holding 53.99%, Mr. Prateek Verma holding 26.31%, Klondike Investments Ltd holding 12.50%, and others holding 7.2%.
**Investment Rationale:**
SEDL benefits from a strong industry position as a market leader in energy-efficient sugar processing technologies and aligns with government initiatives for ethanol blending, water conservation, and zero liquid discharge. The company experiences strong export revenue from Southeast Asia, Africa, and Latin America. It also generates recurring revenue through AMC, retrofits, and spare parts supply, and gains from government incentives related to ethanol capacity expansion and energy savings.
**Key Risks:**
SEDL faces risks related to project execution cycles, with delays impacting revenue recognition. The company is dependent on a limited number of large sugar clients. Its project nature requires high upfront costs and long receivable cycles, making it working capital intensive. Raw material costs, particularly steel and machinery components, are sensitive to commodity price fluctuations.
**IPO Timeline and Exit Options:**
Exit options include private secondary transactions via platforms like UnlistedZone, strategic stake sales to institutional investors for growth expansion, and a potential IPO in the coming 18-24 months, dependent on order book scaling.
**UnlistedZone View:**
UnlistedZone has an "Accumulate" rating with a 2-3 year investment horizon. SEDL demonstrates technological innovation and execution capabilities, and is well-positioned due to increasing global and domestic demand for clean and energy-efficient solutions in sugar and ethanol. Investors should consider execution cycles and working capital needs. The target valuation post-IPO is subject to market conditions and order book visibility.
