IPO Size: Rs. 451 cr, Entirely Offer for Sale (OFS)

• By promoter (88% stake to drop to 70% post IPO)

Price band: Rs. 235-247 per share

M cap: Rs. 2,524 cr, implying 18% of post issue capital

IPO Date: Tue 16^th Sep to Thu 18^th Sep 2025, Listing Tue 23^rd Sep 2025

Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.

Decorative Wall Panel and Laminate Seller

Euro Pratik Sales sells decorative wall panels and laminates under ‘Euro Pratik’ and ‘Gloirio’ brands. It does not have own manufacturing facilities (which is undertaken through under 3^rd party contracts in India, China and South Korea), hence business is asset light with RoE of 36%. In FY25, company acquired many related parties to consolidate operations in 1 company, increasing distributor count in the country to 180, from 97 in FY24.  

Patchy Track Record

Topline has fluctuated from Rs. 260 cr in FY23 to Rs. 222 cr in FY24 and then rising to Rs. 284 cr in FY25. Wall panels account for 66% of Rs. 284 cr revenue, while laminates were 26% of topline.

Company’s revenue growth rate has trailed industry growth, forget capturing share from shift from unorganized to organized. The decorative wall panels industry was valued at Rs. 2,800 cr in FY25, up 17% YoY, but Euro Pratik’s wall panel revenue rose at only 11% in FY25. Similarly for decorative laminates - the industry posted 7-8% annual growth but company’s decorative laminate sales has remained stagnant in the past 4 years, down from Rs. 76 cr in FY22 to Rs. 73 cr in FY25.

High Margins Business

While revenue has been fluctuating, company’s margins are very high at 45% gross, 38% EBITDA, 27% net. FY25 PAT stood at Rs. 76 cr, translating into an EPS of Rs.7.5, on an equity of Rs. 10.2 cr (face value of Re. 1 each). Company is also debt-free, with net cash of Rs. 20 cr, or Rs. 2 per share, on net worth of Rs. 234 cr.

Working Capital Intensive

Company’s business demands high working capital, with Rs. 180 cr blocked in debtors and inventory, and hardly getting any credit from suppliers. On Rs. 280 cr topline, this amounts to ~8 month of working capital. Moreover, working capital position has weakened in FY25, from 4.5 months in all the prior fiscals since FY22. Essentially, the Rs. 60 cr increased revenue of FY25 over FY24 is yet to be realized, as debtors increased by Rs. 52 cr during FY25.

Cautious FY26E Outlook

Company essentially imports products from South Korea and China and sells them in India. FY26 margin outlook is impacted by rupee depreciation, as 50% of purchases is in foreign currency (American dollar and Chinese Yuan). Also, on 26.4.25, fire at company’s largest warehouse destroyed Rs. 34 cr worth of inventory and impacted business in Q1FY26. These factors keep FY26E outlook cautions.

Micro-Cap Stock

M cap of Rs. 2,524 cr leads to a PE multiple of 31x, in a best-case scenario of FY26E EPS of about Rs. 8. While margin is high, stagnant topline, poor outlook and deteriorating working capital are big negatives.