Kalpena Plastiks Limited

Transcription

1 07 March 2013 CMP: Rs 9.38 Industry: Plastic Products BSE Group: T Promoters Kalpena Industries Ltd (36.2%) Shriram Financial Consultants Pvt. Ltd (36.3%) Year of incorporation 1989 Corporate office 3, Saheed Nityananda Saha Sarani Kolkata West Bengal - India Company website Write to us at equity.research@outlook.com Key data BSE ISIN INE465K01016 Face Value (Rs.) 10.0 Mkt Cap (Rs mn) 49.4 Current P/E 14.4 Current P/BV Week High-Low day daily trading volume (no.s) 222 Equity Capital (Rs mn) 55.3 Net worth (Rs mn) 59.7 Company business Kalpena Plastiks Limited is engaged in the manufacture and sale of cosmetic jewellery, hawai chappal, plastic colour granules, plastic colour powder, PE compound, PVC compound etc. The company also trades in plastic compounds such as PVC compound (without filler), colour master batch, PE compound and PVC compound in India. The company was formerly known as Sarla Gems Limited and changed its name to Kalpena Plastiks Limited in J. Tiwari is the non-executive chairman of the company. Peer group analysis The EBIDTA margin and PAT margin of the company is lowest among the peers. This is reflected in the company s profitability ratios. The company has no borrowings as on 31 March The stock price on 31 March 2012 discounts book value by 2.6 times. The stock is trading at a premium to its peers on price to book value basis. FY12, Rs in mn Kalpena Plastiks Zodiac- JRD-MKJ Godiam International Vaibhav Global Total income EBIDTA (0.6) EBIDTA margin (0.1%) 6.0% 13.0% 14.6% PAT (0.7) PAT margin (0.2%) 4.2% 8.7% 7.4% EPS (Rs.) (0.1) Cash accruals (0.6) BV/share Debt/EBIDTA Debt/equity ROANW (1.2%) 1.8% 5.3% 3.8% ROACE (1.1%) 2.3% 6.6% 5.1% P/E Negative P/BV FV (Rs.) Source: Moneycontrol, Company, BSE Page 1 of 5

2 Price performance with index Jan Jan Jan Jan-13 Source: Company, BSE Kalpena Plastik Small Cap Public shareholding >1% Sr. No. Name of shareholder No. of shares held (mn) Shares as %age of total shares 1 Sikkim Bank Limited Total Source: BSE Change in shareholding pattern (%) Shareholding pattern - As on 31 December 2012 Year Promoter FII DII Others Dec Sep Jun Mar Dec Dec Dec Dec Dec % 72% Promoter FII DII Others Source: BSE Page 2 of 5

3 Rising cost of raw materials Small-scale sector contributes 25% of total production The industry is expected to grow at 10-12% The industry expects reduction in excise duty and import duty Key Concerns Rising cost of raw materials particularly polymer, PVC Resin and plasticizer will impact the profitability. Apart from this, easy entry of new players with minimum capital and cheaper imports also put pressure on the margins. Industry overview The Indian plastic industry can be categorized into two segments namely upstream (manufacturing of polymer) and downstream (conversion of polymers into plastic). The downstream plastic industry is highly fragmented and consists of micro, small and medium units. The industry covers around processing units of which 75% of units are in the small-scale sector. It accounts for about 25% of the total production. The industry caters to the requirements of a wide array of application like packaging, automobile, consumer durables and healthcare etc. The industry is expected to grow at 10-12% during FY13. The growth in the KPL s polymer compounds business is linked to growth in the packaging, footwear and cable industries. The industry expects reduction in excise duty and import duty as shown below: Excise duty on plastic products 12% Expected to reduce to 8% Import duty on polymers of primary forms 5% Expected to reduce to 2.5% The industry also expects 5% reduction of import duties on plastic processing machineries. This will help upgrade production facilities of the plastic industry. Change in name from Sarla Gems Ltd to Kalpena Plastiks Ltd KPL started trading in plastic compounds Company fundamentals The company was engaged in the business of Gems and Jewellery. It has discontinued its Gems/Jewellery business and diversified into the business of plastics, granules and PVC. The company also changed its main objects in the MoA by substituting the objects related to its new business. In October 2009, the company has changed its name from Sarla Gems Limited to Kalpena Plastiks Limited in order to facilitate its diversified business. During FY12, the company started trading in plastic compounds. These compounds include PVC compounds without filler, PE compounds, PVC compounds, colour master batch etc. The income from sale of these products contributed around 54% of total income in FY12 (Nil in FY11). Key financial indicators The company s total income grew significantly by 115% from Rs 191 mn in FY11 to Rs 412 mn in FY12. The sale of traded goods contributed approximately 54% of total income. KPL made a loss of Rs 0.7 mn in FY12 (a net profit of Rs 0.7 mn in FY11) However, the company made a loss (before depreciation, tax and interest) of Rs 0.6 mn in FY12 (Rs 1.1 mn in FY11). During FY12 the company purchased traded goods amounting to Rs mn (Rs Nil in FY11). The company made a loss (after tax) of Rs 0.7 mn in FY12, compared to a net profit of Rs 0.7 mn in FY11. In FY10 KPL issued and allotted 3.26 mn equity shares of Rs 10 each to the Kalpena Page 3 of 5

4 Promoters shareholding increased to 72.5% (Mar-10) upon issuance of 3.26 mn equity shares on preferential basis Kalpena Plastiks Limited Industries Limited (promoter group company) on a preferential basis. The objective of the issuance was to raise resources for long term working capital requirements i.e. to improve company s financial position. Consequently KPL s paid-up share capital increased from Rs 22.7 mn (2.27 mn equity shares of Rs 10 each) to Rs 55.2 mn (5.52 mn equity shares of Rs 10 each). This also resulted in increase in the shareholding of the promoter group in KPL to 72.5% (Mar-10 quarter end) from 32.62% (Dec-09 quarter end). Presently, promoter group of KPL includes Kalpena Industries Limited (holds 36.23% in KPL) and Shriram Financial Consultants Private Limited (36.26%). Quarterly results Particulars (Rs in mn) Apr'12-Jun'12 Apr'11-Jun'11 % Chg [1] Jan'12-Mar'12 % Chg [2] Total income % (2.4%) Total expenditure % (2.4%) EBIDTA 0.22 (1.45) (115.2%) 0.30 (26.7%) EBIDTA margin 0.0% (3.5%) PBT 0.04 (1.52) (102.6%) 0.18 (77.8%) PAT 0.04 (1.52) (102.6%) 0.18 (77.8%) PAT margin 0.0% (3.7%) Cash accruals 0.1 (1.46) EPS (Rs.) 0.01 (0.27) (103.7%) 0.03 (66.7%) [1] Compared to corresponding quarter in the previous year [2] Sequential comparison Source: Company, BSE filings Total income for Jun-12 quarter and Mar-12 quarter includes income from sale of traded goods. KPL started trading in PE compounds, PVC compounds, colour master batch etc in FY12. Revenue (FY12) Book value per share % Manufactured goods % Traded goods Manufactured goods: hawai chappal, plastic colour granules, plastic colour powder, PE/PVC compound etc Traded goods: PE/PVC compounds, color master batch etc Profitability ratios BV per share Earnings per share (EPS) 1.9% 2.2% 1.2% 1.6% % -1.1% ROANW (%) ROACE (%) EPS Page 4 of 5

5 Financials P&L (Rs. mn) Balance Sheet (Rs. mn) Kalpena Plastiks Limited Total income * Equity share capital EBIDTA (0.6) Reserves & surplus EBIDTA margin 0.1% 0.5% (0.1%) Net worth Depreciation Borrowings EBIT (0.7) Deferred tax liabilities Interest Current liabilities & provisions PBT (0.7) Total liabilities Tax Fixed assets PAT (0.7) Investments PAT margin 0.1% 0.4% (0.2%) Long term loans & advances Dividend (including tax) Current assets Dividend per share Total assets *Including traded income of Rs mn Valuation ratios Cash Flow (Rs. mn) P/E (220.4) PBT (0.7) P/BV CF from Operation (30.1) (17.2) 47.2 Source: Company CF from Investment (0.3) 3.4 (1.3) CF from Financing Inc/(dec) in Cash 2.1 (13.8) 45.9 Closing Balance Disclaimer The information contained herein is from publicly available data or other sources believed to be reliable, but we do not represent that it is accurate or complete and it should not be relied on as such. Our company shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. This document is provided for assistance only and is not intended to be and must not alone be taken as the basis for any investment decision. The user assumes the entire risk of any use made of this information. Each recipient of this document should make such investigation as it deems necessary to arrive at an independent evaluation which may affect their investment in the securities of companies referred to in this document (including the merits and risks involved). The discussions or views expressed may not be suitable for all investors. This information is strictly confidential and is being furnished to you solely for your information. Page 5 of 5