Shivani Nyati, the Head of Wealth at Swastika Investmart, noted that Sanstar's financial performance shows a mixed picture, highlighting recent declines in revenue alongside growth in profitability. However, she emphasized that several key risks need careful consideration. These include fluctuations in raw material prices, exposure to global market volatility, intense competition, and a lack of diversification beyond maize-based products, which pose challenges for future growth.
Nyati stated that the IPO valuation of 20x P/E seems fully priced. While she acknowledged the potential for listing gains, she advised a cautious approach due to the identified risks. Consequently, she recommended a "subscribe" rating for the IPO primarily for the purpose of potential listing gains.
