Overview :
Company is into the packaging segment and is the largest exporter of BOPP films from India. They provides Films
and Lamination's and serve various industries like Food Packaging,
Industrial packaging, Printing & Lamination (magazine covers, gift
wraps, etc).
They have plants in India, US, Europe, Korea and have global customer base exporting to over 45 countries.
They have plants in India, US, Europe, Korea and have global customer base exporting to over 45 countries.
Valuations :
What
caught my attention here is the undervaluation of the stock. This year
sales on standalone basis were at 1472cr and the current market cap is
just 240cr with P/E around 6.
Promoter holding is at 43% and its consistently dividend paying. This year they paid 35% dividend. Last few years company faced troubles due to higher raw material costs + weak global economic conditions. Even during those times company managed to pay dividend.
On the Balance sheet side, they are generating 1472cr revenue from total assets of 1000cr. Their debtors and creditors are very good at 7% and 9.5%. Inventory days in just 24 days. D/E is around 0.95. They have reduced their debt by over 20% this year. They have healthy cash flow from operating activities. They have cash bank balance of 13cr. Nothing worrisome on contingent liabilities side.
The total equity is 410cr while the market cap is 240cr so the P/B is just ~0.58
With available information so far, they don't have any plans for expansion. This would reduce the cash outflow from investing activities thereby increase in the overall net cash flow. However they haven't mentioned anywhere about the current utilization (current installed capacity is 116,200 MT)
Promoter holding is at 43% and its consistently dividend paying. This year they paid 35% dividend. Last few years company faced troubles due to higher raw material costs + weak global economic conditions. Even during those times company managed to pay dividend.
On the Balance sheet side, they are generating 1472cr revenue from total assets of 1000cr. Their debtors and creditors are very good at 7% and 9.5%. Inventory days in just 24 days. D/E is around 0.95. They have reduced their debt by over 20% this year. They have healthy cash flow from operating activities. They have cash bank balance of 13cr. Nothing worrisome on contingent liabilities side.
The total equity is 410cr while the market cap is 240cr so the P/B is just ~0.58
With available information so far, they don't have any plans for expansion. This would reduce the cash outflow from investing activities thereby increase in the overall net cash flow. However they haven't mentioned anywhere about the current utilization (current installed capacity is 116,200 MT)
Future outlook :
Company seems to have good market share in the packaging sector. With increasing urban population and thereby increased consumption of FMCG products, company is poised to tap this opportunity. Increased demand of packaged food should also act as fuel in the growth. They are serving the segment which would grow in future.Summary :
Disc : Vested interest; Hold few shares. Shouldn't be considered as recommendation to buy/sell.
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