RATING

RECOMMENDATION

Strong Buy

  • Urban Tots Deepak Houseware and Toys
  • ₹40.00

  • PLACE ORDER
  • ROFR Required
  • Available in Depository:

  • NSDL

  • CDSL

  • Available for Investment:

  • Primary

  • Secondary

RATING

RECOMMENDATION

Strong Buy

Business Type

Emerging Leader

RATING

RECOMMENDATION

Strong Buy

Business Type

Emerging Leader

  • Urban Tots Growth

Urban Tots Revenue Growth

Growth in %

  • 162804.93%

    1 Year

The company was incorporated on August 6, 2020 and has made significant improvements in its operations. The company's sales channel comprises of its online presence, pioneer retail channels like Reliance Retail, Hamleys, and many others, as well as its own retail store, Urban Tots. The company had generated zero revenue in its initial year due to the COVID-19 lockdown. The company had started its operations by the month of August, 2021, when the company was able to import its machinery from China and install it in its factory, which in turn helped them generate Rs. 16.3 Cr. worth of revenue. Other income accounts for only 0.6%, whilst revenue from the sale of products constitutes 99.6% of the total revenue. 

Urban Tots Net Profit Growth(PAT)

Growth in %

  • NA

    1 Year

The company has in total made a net profit of Rs. 3.3 Cr. with a net margin of 20%, which shows that the company, in its initial phase, has been productive in converting its inventory into sales as inventory days have been far less than receivables, which shows the company has been reaching out to customers as well as productively turning around its inventory in an efficient manner, leading to an abnormal profit in just 20 months of incorporation. 

Urban Tots EPS Growth

Growth in %

  • NA

    1 Year

The EPS of the company grew tremendously on account of the high net profit generated by the company in FY22. It must be noted that the number of shares has also increased by 433x. Despite that, the company has witnessed higher EPS than in FY21. 

  • Urban Tots Book Value Growth

The company has improved its book value as the company has raised capital through fresh issues, rights issues, and bonus issues, which have collectively increased the book value of the company for FY22. DH&T also made profits in FY22, which further boosted the book value of the company. 

Urban Tots EBITDA Growth

Growth in %

  • NA

    1 Year

The company registered an EBITDA of Rs. 4.9 Cr. in FY22. This denotes an EBITDA margin of 30%. The company incurred a total expense of Rs. 2.5 Cr. in FY22. On the other hand, the cost of goods sold has accounted for 55% of the revenue, where the company has incurred heavy expenses. With already 60 machines in operation, management has further planned to increase the number of machines to achieve economies of scale as business matures. 

Urban Tots Operating Profit Growth

Growth in %

  • NA

    1 Year

The company had made a total of Rs. 4.2 Cr. as an operating profit. The company has added 60 new machines in FY22, which accounts for depreciation of Rs. 70 lakhs. The toy industry is heavily capital intensive, which requires moulds of various sizes to be in place to produce differentiated products. 

Urban Tots Asset Growth

Growth in %

  • 3298.50%

    1 Year

The company, when started, had a value of Rs. 88 lakhs in assets till FY21. Due to the COVID-19 lockdown and restrictions, imports and exports were banned temporarily from the country from which the company had ordered its machines. From August 2021 to March 31st, 2022, the company has added 60 new machines and is planning to add more to meet demand and provide the structure for later stages of business. Total assets of the company were Rs. 30 Cr. in FY22.

Urban Tots Cash Flow from Operations

Growth in %

  • NA

    1 Year

  • Urban Tots Solvency Ratios


Urban Tots D/E Ratio

The company is in the initial phase of operations; hence, to keep the operations running, the company had to raise capital using debt as well as equity. The company took a secured loan worth Rs. 6 Cr. and a cash credit limit for working capital requirements worth Rs. 3.8 Cr. from Punjab Bank. The company has also raised capital using directors and relatives, worth Rs. 2.3 Cr. On the other hand, the company has issued fresh issues, rights issues, and bonus issues to raise capital using equity. The total equity of the company rose by a factor of 43x. Aggregately, debt outweighs the total equity raised, hence the poor debt to equity ratio. 

Urban Tots Current Ratio

Current ratio of the company in FY22 is at 1.6, which indicates current assets are just enough to pay off its current liabilities. Cash credit, which the company had undertaken to meet its working capital requirement has increased the denominator leading to poor current ratio. 

Urban Tots Quick Ratio

Inventory accounts for 28% of the current assets of the company in FY22. Taking it out of the equation leads to low quick ratio.

Urban Tots Interest Coverage Ratio

Despite the fact that the company has raised a total of Rs. 12 Cr. from debt, the interest coverage ratio of the company has been high on the account of the subsidy provided by the Rajasthan government on interest payment, which led to lower interest payment and higher interest coverage ratio. 

  • Urban Tots Operating Efficiency

The company has been doing fairly well in terms of operating efficiency. The company has various sales channels, which converted into sales of products worth Rs. 16 Cr. and the company's ability to turnaround its inventory has placed an important fact on operating efficiency. The company's major expense in FY22 was the cost of goods sold, which accounts for 55% of sales of products. Aside from that, the company did well in terms of fixed and variable costs, resulting in high operating efficiency.

Urban Tots Operating Profit EBIT Margin(OPM)

Urban Tots Profit Before Tax Margin (PBT Margin)

Urban Tots Profit After Tax Margin (PAT Margin)

  • Urban Tots Profitablity Ratio


Urban Tots Return on Equity(RoE)

As per Dupont Analysis, the company has an ROE of 60% on account of a high net income margin of 20%, owing to being one of the first organised movers in the industry, and a very significant equity multiplier as the company has financed most of its operations by raising equity, which led to a high ROE in FY22. Asset turnover, on the other hand, was not significant as the company has yet to achieve economies of scale in its operation. 

Urban Tots Return on Capital Employed(RoCE)

Total capital employed by the company in FY22 was Rs. 19 Cr. The company has effectively put its capital employed into its use and leading to expense new machineries as well as capital requirements, which collectively led to ROCE of 42%.

Urban Tots Return to Assets (RoA)

The company is in its initial stage, hence existing assets would generate higher profits. Although the company has fairly performed and achieved a ROA of 21% in FY22,

  • Urban Tots Valuation Ratios

Urban Tots Earning Yield