“Polyplex Corporation “ Are Good Days Ahead?

Parthgarg · September 13, 2019, 12:09pm

The company has contingent liability of around 1400 Cr, and they have written in there AR FY19 that it is probable that they will have to settle the liability.

This can be the reason of not using cash to settle debt.

VALUE2017 · September 13, 2019, 4:17pm

VALUE2017 · September 13, 2019, 4:23pm

I could not find in the Annual report , can you please advise the page number.

Parthgarg · September 13, 2019, 4:45pm

I forgot to mention page number in my previous reply.
You can get this on page 92 (standalone) and on 149 (consolidated).

But there is no major change in consolidated numbers.

VALUE2017 · September 13, 2019, 4:49pm

I am still not able to find in relevant pages. …Please advise

Parthgarg · September 13, 2019, 5:14pm

In this para the company have stated that “It is probable that the group will be required to settle the obligation, whose amount can be recognised”

And in note 44 the amounts are given.

inteliinv · December 22, 2019, 5:26pm

The amounts are in lacs and not crores. Let me know where is it mentioned 1400 crores??

Parthgarg · December 23, 2019, 6:27am

My bad, i just checked.
I dont know how i missed that.
Sorry for misleading.

inteliinv · December 23, 2019, 6:59am

Hi Parth, thanks for clarifying

Regards
Krishna

bhaskarbora67 · February 1, 2020, 4:40am

good post on polyplex

https://myinvestmentdiary.com/company-analysis/polyplex-corporation-ltd-a-turnaround-story/

vikas_sinha · February 2, 2020, 5:01am

I agree with the above post:

Margins are steadily improving, back to historic highs of 20%.
Credit rating has improved to A+, noting the large demand-supply gap
It also notes the well-diversified markets with 50% in mature US, EU and 50% in growing Asia
Good value added product range, RM prices are expected to be flat/low
Some growth with Indonesia capex and overall efficiency focus
10% dividend yield! Very low and decreasing debt
High FCF for 5 years now, best performance and lowest valuation amongst peers
Steadily increasing institutional interest

26 DEC 2019
India Ratings Assigns Polyplex Corporation ‘IND A+’; Outlook Stable
https://www.indiaratings.co.in/PressRelease?pressReleaseID=39592&title=india-ratings-assigns-polyplex-corporation-‘ind-a%2B’%3B-outlook-stable

Disc: Entered yesterday, 9% of holdings at average of 530.

vikas_sinha · February 6, 2020, 11:44am

Raw material PTA prices to fall by $30 per tonne (I think more about $70), ADD abolished in budget.

PET film is made from Polyester resin (chips), which in turn is produced from Purified Terephthalic Acid (PTA) & Mono-Ethylene Glycol (MEG). PET Resin is key raw material for production of PET films. Polyplex Corp Ltd (PCL) is a backward integrated player as company produces its own PET resin which is further utilized for manufacturing of Base films comprising PET thin, PET thick, BOPP, CPP, and Blown PP. PCL has production capacity of 2,73,300 MT PET film resin which is more than its Base film production capacity of 2,68,645 MT as on 31st March 2017.

PS: Crude falling everyday, may touch record lows!

jigyasu_investor · February 12, 2020, 3:03am

While looking up at the moneycontrol, I came across the mentioned "contingent liabilities of 1569.41 crs on the consolidated balance sheet (which is worth a number as its 89% of their MCap) though while I was reading their annual report of Yr 2018-19, I came across contingent liabilities of only 12.44 crs (Page 185). Can somebody put some light on this ?

bhaskarbora67 · February 15, 2020, 1:59pm

Edelweiss conference notes

Key takeaways
• PCL(polyplex) is among the leading players (sixth-largest globally with a 6–7% share) in thin
BOPET packaging films with a transnational asset and resource base.
• Q3FY20 sales volume grew 9% YoY led by capacity addition at Indonesia.
• 9mFY20 EBIDTA grew 17% YoY.
• Low-cost structure (on DDP basis) for PCL helps sustain competitive advantage and
changing cost dynamics may force closure/underutilisation of older inefficient lines
for the industry.
• Management expects stable value-added spreads of USD1.06/kg despite decline in
realisation due to corresponding decline in raw material cost. This will also be led
by increasing proportion of specialty film to 35% of overall sales, which help sustain
superior margin despite crude volatility.
• The company will augment overall capacity by 38% over FY20–22E. Management
has guided for capex worth USD160mn over FY20–22E with incremental EBITAA
(USD49mn) and is targeting incremental pre-tax ROCE of 15% from the same.
• Management believes demand-supply is favourable with ~0.9mt of capacity to be
added in thin PET films over 2020-22 globally versus 0.7mt of equivalent demand
growth globally. While additions are expected to be evenly spread out and in line
with demand growth, it expects temporary margin pressure from influx of new
supplies.

jigyasu_investor · February 16, 2020, 7:20am

Its an intereting case :
MCap : 1660 crs
Sales (2018-19) : 4733 crs
PBT (2018-19) : 653 crs
Book Value : 2771 crs
WC : 1288.28 crs
Cash ans Investments : 1049 Crs
Debt and other libilities : 947 crs

So the whole company is available at 1.3x on the WC.
After settling all the liabilities, we are getting 900 crs of Tangible Assets for free (though some loans aand advances are to vendors)
Q1 + Q2 + Q3 PBT = 553.24 crs (with 14.2% margin as compared to 13.8% last year)

Current MCap of Thailand Sub. is 2805 crs ( 51% owned by Polyplex , excluding the 30% holding company discount).

With the current drop in the prices of PTA, realizations are going to on the soft side but can be compensated by value-added products through margins. Looking 5 years down the line, what are , its hard to put common sense of where they will be. @vikas_sinha can you put more light on your investment thesis and how much fraction does “Value” played in your decision ?

vikas_sinha · February 16, 2020, 7:29am

Sorry, I sold this off, with a marginal gain, somehow between 520-560 bounce the past month. Am trying to concentrate portfolio on non-commodity biz. Low RM price means weaker realization here indeed.
Valuations on several metrics look cheap but don’t commodity cycles have a buy phase at peak PE? They might be expanding but the returns may be squeezed by overall industry capacity issue, though the downside has been predicted to be limited.

vikas_sinha · February 22, 2020, 6:32am

Q3 presentation:

commodity does not give confidence inspite of mgmt/co quality. Other income was very low hence the marginal PA/BT decline YoY, huge if seen QoQ, while peer group are booming.

Disc: exited to consolidate portfolio, re-evaluating v/s Cosmo etc.

Viijayaragavan · April 7, 2020, 4:54am

POLYPLEX CORPORATION LTD.has informed BSE that the meeting of the Board of Directors of the Company is scheduled on 09/04/2020 ,inter alia, to consider and approve Please note that a meeting of the Board of Directors has been convened to be held on Thursday, April 9, 2020, to consider and evaluate the proposal for buy back of equity shares of the company and matters incidental thereto in accordance with the provisions of SEBI (Buy back of Securities) Regulations 2018, read with the relevant provisions of the Companies Act, 2013 and Rules made thereunder.

Viijayaragavan · April 7, 2020, 4:56am

Disclosure regarding partial resumption of operations at company’s manufacturing units in Uttarakhand, India.

Gothamcapital · April 8, 2020, 4:35pm

The brother of the chairman was arrested.I know this is an old post ,but what to make of this?

“The Economic Offences Wing (EOW) Odisha’s Crime Branch on Friday arrested Rohit Kumar Saraf, Joint MD of metal firm Ferro Alloys Corporation Limited of the FACOR Group. Saraf was arrested from Jhunjhunu in Rajasthan along with Sajjan K Surekha, who was arrested in Kolkata, in connection with a case of land fraud near Pipilli in Puri district of Odisha.”