Angel recommends to ‘Avoid’ A2Z Maintenance IPO

MUMBAI: Angel Broking has advised investors to ‘ Avoid’ subscribing to the initial public offer of A2Z Maintenance and Engineering.

“Currently, A2Z derives its revenue and profitability from the power EPC business; the MSW and power generation projects are expected to contribute meaningfully from FY2013. Since FY2011 and FY2012 revenue would largely be dominated by the power distribution EPC business, the appropriate peer comparison would be with Jyoti Structures, KEC International and Kalpataru Power Transmission.

Even at the lower price band of Rs 400, A2Z would trade at a P/E multiple of 23x FY2010 earnings, while its peers are currently trading at an average P/E of 12.5x their TTM earnings, thus placing the scrip relatively expensive. Hence, we recommend Avoid on the IPO,” the report said.