Prima Plastics


(J2EE Professional) #83

ok. Also, one should know that the raw material prices are not dictated by international crude prices but what is passed on by Reliance to companies these companies like prima,nilkalam and wimplast (they all source mainly from reliance).


(sowrabh) #84

guys please check this report given by idbi capital on prima plastics dated feb 08 2016


(J2EE Professional) #85

thanks, the report is surely reassuring…


(sowrabh) #86

any idea what is their present subsidiary’s 100% capacity in terms of revenue?? and also any expectation of sales from their subsidiary this year??


(J2EE Professional) #87

this is not the right way to find out the potential revenue of the company because it is ultimately dicated by the product mix and the price per unit and therefore, not the right barometer. Also, last year, there was huge inventory losses for the overseas entity which would not happen this year, infact, it would have much better OPMs this year due to lower raw material prices, so we can expect a very strong consolidated EPS this year


(sowrabh) #88

sorry im still a rookie in this…its been a year since i started investing…i think we can see an eps of about 12 …what do u think?


(J2EE Professional) #89

hopefully something around this.


(sowrabh) #90

prima plastics to give 2nd interim dividend


(J2EE Professional) #91

this was expected…by the way it should be final dividend but is being termed as interim…budget effect you know :slight_smile:


(sowrabh) #92

ya even i had thought so that this could be the final one :slightly_smiling:


(Rama Kumara Nagaraja) #93

Dear Sirs and @j2eeprofession_

I am heavily invested in prima plastics as i see them hitting good numbers in a few years.
Can some one point out how falling crude prices help prima? i read somewhere on the forum

Thanks,
Ramu


(TT) #95

From my understanding of the Indian polymer industry, falling crude prices have some impact on cost of raw material for the company but not to the exact same extent as the reduction in crude prices. Theoretically and solely in my opinion, Reliance Industries is the largest crude refiner in India and also produces almost the entire quantity of polymers used by the Indian industry. In a falling crude price situation, Reliance passes on some of this benefit to its consumers which would be companies like Prima) but retains a majority of the benefits to itself. This is the reason why Reliance performance was stellar last quarter and probably will be this quarter as well. Therefore, any optimism in terms of fall in crude price should be tempered because a majority of the gains are swallowed by Reliance. However, even a 5-10% lower cost for Prima would result in disproportionate increase in the bottomline.


(Rama Kumara Nagaraja) #96

Hi @Leading_Nowhere,

That’s a nice logical explanation, but my query still remains.
The primary core business of prima is to make moulded chairs (seen a few in my aunts home :slight_smile:).

Do they use polymers as raw material for the same? Pls excuse my ignorance on this topic

ramu


(TT) #97

Yes, polymer is a basic raw material for the company, which is further processed and moulded after adding certain substances for required characteristics including hardness, strength, colour etc (these are called masterbatches - Plastiblends is one such company which supplies masterbatches but there are many smaller players too).


(J2EE Professional) #98

i think one of the fellow boarders has correctly answered you on the standalone numbers. For consolidated numbers i expect very good numbers as it is directly tied to international crude prices and more importantly last year the overseas entity had to deal with inventory losses in its last quarter which spoiled the consolidated numbers. This year, that would not happen and in all probability it will give major fillip to the consolidated earnings.But one would do good if we do not focus on just for a year or so and make the horizon longer term as with improving roe and roce and rising dividends, this one is going for the kill and will soon start debuing on the biggers guys screeners. and let’s not forget its debt free.


(Rama Kumara Nagaraja) #99

How do u propose they will deal with the competition of nilkamal and other seasoned players?
PS: i read the MD of prima is some nephew of nilkamal’s promoter, weird :slight_smile:


(J2EE Professional) #100

this is not new and they have been doing very well for last so many years. Infact you should try to compare the numbers/margins of nilkamal (ofcourse their plastic division not their retail division) with prima (plastic division and not acp numbers) for last ten years and you will find the numbers of prima to be much better than nilkamal. I am not too worried about competition. Infact the market is so huge that all can grow.


#101

@j2eeprofession_,

Why would the company continue to book losses on a quarterly basis when the ACP division was closed last FY itself? Any idea by when these losses would be fully retired?
Thanks.


(J2EE Professional) #102

the division was closed in last quarter of last FY but the inventory had to be cleared and the losses were inventory losses that they booked in this respect. Anyways, if you see the losses that are booked are almost negligible in the last quarter so i think this quarter it should be the last lot, if at all.


(Rohinee) #103

any idea when are the results expected?