Rs 250M Luminex IPO opens today


Luminex Limited, an engineering firm that specializes in tele-communications, mechanical, electrical, and civil engineering. Electrical and telecommunication engineering that is set to open its Rs 250 M or 11.52 % initial public offering (IPO) from today, 19 May.
According to research note released by the Bartleet Religare Securities, Luminex profit after tax  (PAT)  expanded 214% YoY to Rs 295 million in FY20/21 aided by top line growth of 65% YoY to Rs 2.55bn.

 The top line performance was aided by 150,000 new Sri Lanka Telecom Connections for the supply and delivery of Fibre to the Home connections (FTTH), which contributed Rs 2.1bn. For 6M FY22, Luminex has posted a PAT of LKR 287mn and is on track to be the company’s most successful year as of yet.

This was mainly attributable to the rise in top line where they have achieved Rs 1.5bn stemming from telecom projects from SLT and Dialog.

Furthermore, GP and EBIT margins seemed to have improved significantly as it stands at 35.1% and 24.4% respectively for the 6M FY22E whilst the margins seen during FY20/21 were at 27.6% and 16.4% respectively.

Luminex achieved these numbers by increasing their order book through more projects in their pipeline (seen an increase in water projects), whilst keeping operating expenses relatively stable.

The company has formed a joint venture with JN Construction (Pvt) Ltd (JNC) to enter a new revenue area to undertake water projects.

This was mainly done to work with a Construction Industry Development Authority accreditation partner.

This JV is not a separate legal organization, but rather a formal arrangement between Luminex (96%) and JN Construction (Pvt) Ltd to share revenue (4%). A project undertaken by the JV is 93% complete and handed over in April 2022.

The company obtained 16 water projects worth more than LKR 1.8bn without going through the JV.

Luminex Limited signed two contracts worth Rs 2.6bn and Rs 500mn with one of the main telecom service providers in February 2022 and obtained sup- porting financial facilities of Rs 3.7bn from Sampath Bank PLC.

This arrangement is conducted out in the normal operating cycle, with income and profits projected over the next two financial years.

According to Bartleet Religare Securities, Luminex business volumes are expected to grow with further investments by tele- com companies through upgrading infrastructure to meet the data driven demand including direct fibre optic connectivity. Increased focus on water purification and distribution is also expected to drive revenue growth in the EMP (Electro Metal Press- ings) and Civil engineering sectors.

Furthermore, the company sees international expansion as an important part of its future.